International Journal of Management Reviews Volume 8 Issue 1 pp 21ndash47 21
copy Blackwell Publishing Ltd 2006 9600 Garsington Road Oxford OX4 2DQ UK and 350 Main Street Malden MA 02148 USA
Blackwell Publishing LtdOxford UKIJMRInternational Journal of Management Reviews1460-8545copy Blackwell Publishing Ltd 200681ORIGINAL ARTICLEInnovation management measurement A reviewXX
Innovation management measurement A reviewRichard Adams1 John Bessant and Robert Phelps
Measurement of the process of innovation is critical for both practitioners and academicsyet the literature is characterized by a diversity of approaches prescriptions and practices thatcan be confusing and contradictory Conceptualized as a process innovation measurementlends itself to disaggregation into a series of separate studies The consequence of this is theabsence of a holistic framework covering the range of activities required to turn ideas intouseful and marketable products We attempt to address this gap by reviewing the literaturepertaining to the measurement of innovation management at the level of the firm Drawingon a wide body of literature we first develop a synthesized framework of the innovationmanagement process consisting of seven categories inputs management knowledgemanagement innovation strategy organizational culture and structure portfolio managementproject management and commercialization Second we populate each category of theframework with factors empirically demonstrated to be significant in the innovation processand illustrative measures to map the territory of innovation management measurement Thereview makes two important contributions First it takes the difficult step of incorporatinga vastly diverse literature into a single framework Second it provides a framework againstwhich managers can evaluate their own innovation activity explore the extent to which theirorganization is nominally innovative or whether or not innovation is embedded throughouttheir organization and identify areas for improvement
Measuring the Management of Innovation
A considerable literature has accumulatedon the subject of innovation which is widelyseen as the basis of a competitive economy(Porter and Ketels 2003) This literatureincludes evidence that competitive success isdependent upon an organizationrsquos manage-ment of the innovation process and proposesfactors that relate to successful manage-ment of the innovation process (cf interalia Balachandra and Friar 1997 Cooper1979ab de Brentani 1991 Di Benedetto 1996
Ernst 2002 Globe et al 1973 Griffin 1997Rothwell 1992)
Quantifying evaluating and benchmarkinginnovation competence and practice is a sig-nificant and complex issue for many contem-porary organizations (Frenkel et al 2000) Animportant challenge is to measure the com-plex processes that influence the organiza-tionrsquos innovation capability in order that theycan be optimally managed (Cordero 1990)The measurement of innovation is also import-ant from an academic research perspectiveUnless constructs relating to the phenomenonare measurable using commonly accepted
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Innovation management measurement A review
methods there is a risk that different opera-tionalizations of the same effect will produceconflicting findings and that theoreticaladvances become lost in the different termi-nologies that resist the accumulation ofknowledge
Within the literature on the management ofinnovation measures of aspects of innova-tion management are frequently proposedresponding to the needs of both firms andacademics to understand the effectivenessof innovation actions (Barclay 1992 Kim andOh 2002) However their treatment is frag-mented It is possibly a consequence of thisfragmentation that empirical studies havefound many organizations tend to focus onlyon the measurement of innovation inputs andoutputs in terms of spend speed to marketand numbers of new products and ignore theprocesses in-between (Cordero 1990) A gen-eralized measurement framework specifiedat the level of the organization would providea useful basis for managers to monitor andevaluate their innovation processes diagnoselimitations and prescribe remedies (Cebon andNewton 1999) In an attempt to extend meas-urement theory and practice beyond a focuson output performance this paper reviews theliterature as it relates to the measurement ofinnovation management in the context of aconceptual framework of process that pro-vides the basis for a general measurementframework We bring together disparate sug-gestions for innovation management measure-ment made in various parts of the literatureand summarize commonly used measures atdifferent stages of innovation managementWe identify gaps in measurement theory andpractice and point the way toward the devel-opment of a comprehensive set of innovationmanagement measures
Developing an Analytic Framework for Innovation Management Measurement
The innovation literature is a fragmentedcorpus and scholars from a diversity ofdisciplinary backgrounds adopt a variety of
ontological and epistemological positions toinvestigate analyse and report on a phenome-non that is complex and multidimensional(Wolfe 1994) More specifically this diversityis reflected in the multitude of approachesto measurement and the number of differentmeasures that can be found It is difficult toidentify a bounded body of literature in whicha comprehensive discussion of innovationmeasurement issues might be located Repre-senting this diversity within a synthesizedframework is a challenging task
Indeed the term lsquoinnovationrsquo is notoriouslyambiguous and lacks either a single definitionor measure We chose to adopt the UK Depart-ment of Trade and Industryrsquos (DTI 1998)broad definition of innovation lsquothe successfulexploitation of new ideasrsquo to guide ourreview because it accommodates the range ofinnovation types (product service processadministrative technological etc) that onemight reasonably expect to encounter in anorganization This holistic approach is clearlyimportant from the practitionerrsquos perspectiveas it obviates the need to collate measures ona piecemeal basis from a diverse literatureSo while this review is broadly specified itsbreadth presents a number of methodologicalchallenges We address these challenges byemploying the approach of an adapted sys-tematic review
The notion of systematic review hasrecently gained currency in the managementliterature (Denyer and Neely 2004) and thestrategy for this review followed in manyrespects the methodology detailed by Tran-field et al (2003) They state that systematicreviews include development of clear andprecise aims and objectives pre-plannedmethods comprehensive search of all poten-tially relevant articles use of explicit repro-ducible criteria in the selection of articles forreview appraisal of the quality of the researchand the strength of the findings synthesis ofindividual studies using an explicit analyticframework and balanced impartial and com-prehensible presentation of the results Ourreview strategy broadly adopted this model
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but with some changes to suit the exigenciesof our question and data sources notably firstthe inclusion of a Delphi study and second arelaxation of the requirement for reproduciblecriteria for document selection and appraisal
The authors formed a review panel consist-ing of domain-relevant experts from a rangeof disciplines with an interest in both innova-tion and measurement Time was spent outlin-ing the research project which was articulatedin terms of the fragmented world of com-peting and contradictory measures addressingthe issue of the management of innovationRather than attempting to generate an exhaus-tive list our objectives were defined in termsof the collation and synthesis of measuresbetter reflecting the needs of academics andpractitioners we ask lsquoWhat are the measuresthat have been used and to what extent dothey adequately populate and dimensionalizea comprehensive analytic frameworkrsquo
McManus et al (1998) reflecting upon sys-tematic review identified the limitations ofsearching electronic databases as sometimesuncovering only half the relevant studies Theyattribute this in part to a lack of sensitivity ofelectronic databases Indeed this may accountfor the disappointing outcome in terms ofbreadth that Leseure et al (2004) report fromtheir search of electronic databases for litera-ture relating to the adoption of promisingpractices Compensating strategies includeeither hand searching of journals (which wehad to discount on the grounds of time andcost) or consultation with appropriate experts(McManus et al 1998) The latter are partic-ularly important when lsquoperforming a system-atic review in a developing field that does nothave a clearly defined specialist literaturersquo(McManus et al 1998 1563) Using the Del-phi method a process consisting of structureddesign for group communication relating tocomplex problems (Linstone and Turoff 2002)we extended our consultation process toincorporate the input of external experts
A list of global experts in innovation andmeasurement (n = 100) based on the knowledgeof the review panel was developed Potential
respondents were contacted by e-mail and askedto respond to a series of questions relating toinnovation metrics at the level of manage-ment practice particularly addressing aspectsof measuring the existence and effectivenessof the innovation management processThere was a high degree of consensus in the28 responses received All respondents recog-nized the existence of a plethora of extantmeasures obviating the need for new meas-ures to be developed Specifically an absenceof measures well aligned to the activities ofthe innovation process was noted Furtherour attention was drawn to the absence ofdevices to help identify the appropriatemetrics to apply
Systematic review stresses the importanceof an audit trail in the review process toensure clarity and replicability Significant tothis is the use of explicit reproducible criteriain the selection of articles for review and anappraisal of the quality of the research and thestrength of the findings (Tranfield et al 2003)However regardless of a studyrsquos methodologyor generalizability it might still incorporatemeasures of innovation management that couldcontribute to the construction of a measure-ment framework and so grey literature isincluded in this review As we were notreviewing an evidence base in the normallyaccepted use of the term quality criteria asused in previously published systematic reviewsin the management literature (eg Leseureet al 2004 Pittaway et al 2004) in which thevalue of the evidence base is determined byassessed levels of theory robustness method-ology implications for practice generalizabilityand contribution were felt not to be whollyrelevant in this case We instead adopted aposition akin to Glaser and Straussrsquos (1967)notion of lsquotheoretical saturationrsquo which isachieved when
no additional data are being found whereby theresearcher can develop properties of the categoryAs he sees similar instances over and over againthe researcher becomes empirically confident thata category is saturated hellip when one category is
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Innovation management measurement A review
saturated nothing remains but to go on to newgroups for data on other categories and attempt tosaturate these categories also (Glaser and Strauss1967 65)
That is the incremental contribution of furthersampling is marginal and fails to add significantvalue The steps of our review are presented inTable 1
A plethora of studies operationalize meas-ures of aspects of innovation managementhowever to provide some synthesis and iden-tify gaps agreement regarding the nature ofinnovation management is needed The litera-ture lacks such consensus The concept is fre-quently disaggregated into component partsand scholars adopt their own partial views Asa result the operationalization of measures isfrequently idiosyncratic owing more to thepredilections of the researcher and the exigen-cies of the data than to the overarching objec-tives of synthesis or cumulation To organizecompare and contrast such measures we pro-pose a typology of elements of the innovationmanagement process
Many scholars have sought to identify thekey activities of the innovation managementprocess (Wolfe 1994) some of which are pre-sented as linear models (eg Daft 1978) andothers that are dynamic and recursive charac-terized by feedback and feed-forward loops(eg Schroeder et al 1989) While usefulthese models are limited from a measurementperspective first there are many competingmodels with consensus only evident at abstractlevels second models have principally been
generated in the context of technology and sogeneralizability is constrained third with afocus on activities models fail to take accountof the organizational pervasiveness of innova-tion and its socio-technical connectedness withall aspects of the organization or the levelsof integration envisaged in Rothwellrsquos (1992)fifth-generation process model Finally whilethe range and sequence of activities may varyacross organizations and projects their success-ful management is affected by a number offactors Cebon and Newton (1999) call thisthe lsquocapacity to make changersquo about whichthe literature generally is relatively silent(Neely and Hii 1998) Based on a review ofmodels we propose a seven-factor frameworkof meaningful categories specified in terms ofthe requisite organizational capabilities tomake and manage change (see Table 2)
In a review of the factors associated withnew product development (NPD) success Ernst(2002) echoes Cooper and Kleinschmidtrsquos(1995) influential five techno-centric factorsfor new product performance NPD processNPD strategy organization culture and manage-ment commitment This model though over-looks innovation in non-technical contextsand other important factors such as the role ofknowledge (Leonard and Sensniper 1998)
In their technical innovation audit toolChiesa et al (1996) describe process andperformance as the two foci of innovationmanagement measures They overlay lsquocoreprocessesrsquo with a set of lsquoenabling processesrsquothe latter describing the deployment ofresources and the effective use of appropriatesystems and tools governed by top manage-ment leadership and direction Finding thisapplicable only to lsquohardrsquo innovations Ver-haeghe and Kfir (2002) extended the audittool to an investigation of the processes thatsupport and enable both lsquohardrsquo and lsquosoftrsquo (ega research or consultancy project) innovationThe changes they made may appear semanticfor instance relabelling lsquoprocess innovationrsquo aslsquotechnology transferrsquo However the importantimplication is that the study extends the appli-cation of the instrument to service contexts
Table 1 Review strategy
Step 1 Establish review team and scope and nature of the question and search strings
Step 2 Undertake Delphi investigationStep 3 Preliminary search of electronic databasesStep 4 Develop analytic frameworkStep 5 Secondary search of electronic databases and
Delphi studyStep 6 Content analysis of data set sorting of
measures into first order categories defined by the analytic framework
Step 7 Review measures against framework for gaps
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Table 2 Innovation management models and organizing framework
Cooper and Kleinschmidt (1995)
Chiesa et al (1996)
Cormican and OrsquoSullivan (2004)
Goffin and Pfeiffer (1999) Burgelman et al (2004)
Verhaeghe and Kfir (2002)
Inputs Creativity and human resources
Resource availability Idea generation Technology acquisition
Knowledge management
Resource provision
Understand relevant technological developments and competitor strategies
Networking
Strategy NPD strategy Strategy and leadership
Innovation strategy
Strategic management
Organization and culture
Organizational culture Managementcommitment
Leadership Culture and climate
Structural and cultural context of the organization
Portfolio management
NPD process Systems and tools
Planning and selection
Portfolio management
Project management Communication and collaboration
Project management
Development
Commercialization Structure and performance
Commercialization
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Innovation management measurement A review
Furthermore they explicitly bounded theirmodel with notions of inputs and commercial-ized outputs
Cormican and OrsquoSullivan (2004 820) reflect-ing earlier studiesrsquo coverage of the organizationof innovation conceive of product innovationas a continuous and cross-functional processlsquoinvolving and integrating a growing numberof different competencies [inside the organiza-tion]rsquo So effective management of the processrequires successful adoption and adaption of asocio-technical systems approach to all aspectsof the organization critically including peopleand process as well as technology-relatedissues
While there are areas of commonalityacross these innovation management modelsno one model covers every dimension Thissuggests a need for a synthetic and integrativeframework to promote comparability and toenable future work to build on results found inprevious studies In column 1 of Table 2 wepresent such a framework derived from asynthesis of the studies presented in the othercolumns of the table The framework consistsof seven categories inputs knowledge manage-ment strategy organization and culture port-folio management project management andcommercialization
In the following sections we use these seveninductively derived categories as the organiz-ing framework for a discussion of innovationmanagement measurement For each of thesecategories we review the diverse literaturerelevant to the measurement of that typologicalcategory Within each category a series of sub-dimensions of measurement focus are identi-fied reflecting the distinctions and emphasesin the literature (see Table 3)
Measures of Innovation Management
Inputs Management
Inputs management is concerned with theresourcing of innovation activities and includesfactors ranging from finance to human andphysical resources to generating new ideas
The construct research and development (RampD)intensity has frequently been used as a globalmeasure of input Typically it is expressed asa ratio between expenditure (eg Parthasarthyand Hammond 2002) or numbers employedin RampD roles (Kivimaumlki et al 2000) and someexpression of output The relationship betweenRampD intensity and firm or innovation per-formance has been empirically demonstratedin several studies (eg Deeds 2001 Greve2003 Parthasarthy and Hammond 2002)However there is some equivocality in the lit-erature Stock et al (2001) note an inverted-Urelationship between RampD intensity and NPDperformance and Bougrain and Haudeville(2002) point out that it does not influence thefuture prospects of a project and is indeed animperfect measure of innovation activityFurther RampD is only one of several inputs intothe innovation process and therefore cannotbe regarded as an adequate proxy it also doesnot appear to be a very useful measure forsmall and medium-sized enterprises (SMEs)which may not have formal RampD activities ormay not record them (Kleinknecht 1987) orindeed for service industries which tend to havelow RampD intensity (Hipp and Grupp 2005)
Table 3 Innovation management measurement areas
Framework category Measurement areas
Inputs People Physical and financial resources Tools
Knowledge management
Idea generation Knowledge repository Information flows
Innovation strategy Strategic orientation Strategic leadership
Organization and culture
Culture Structure
Portfolio management
Riskreturn balance Optimization tool use
Project management Project efficiency Tools Communications Collaboration
Commercialization Market research Market testing Marketing and sales
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High levels of RampD intensity are thereforenot necessarily evidence of good innovationpractice they may simply mask process inef-ficiencies (Cebon and Newton 1999 Dodgsonand Hinze 2000) However adequate fundingis clearly a critical input into the innovationprocess Expenditure data have long been apopular proxy measure of innovation inputlargely because of their ready availabilitySeveral different approaches both qualitativeand quantitative to measuring funding canbe identified total expenditure expenditureexpressed as a proportion of sales or revenuesand expenditure by item (organizational depart-ment patent innovation or scientist) (Geisler1995 Oliver et al 1999) Also there is aseries of perceptual measures that attempt todetermine the adequacy of funding (Atuahene-Gima 1995) Measures though tend princi-pally to be quantitative and express little otherthan funding level in particular few measuresattempt to determine the adequacy of fundingfor the innovation project Kerssens-vanDrongelen and de Weerd-Nederhof (1999)point to a lack of measurement proceduresto help managers diagnose poor innovationperformance or support improvement
A more helpful measure of inputs maytherefore be obtained by disaggregating inputsinto different types and measuring each inde-pendently before aggregating back to a meas-ure of overall inputs management Brown andSvenson (1988 30) define the inputs into theRampD system as lsquothe raw materials or stimulia system receives and processesrsquo includingpeople equipment facilities and funds Thisfundamental distinction between people toolsand physical and financial resources is widelymirrored in the literature
People factors have been measured as thenumber of people committed to the innovationtask (absolute numbers and relative to totalemployees) in terms of the mix of types ofpeople regarding cosmopolitanism and pro-pensity to innovate and in terms of skillsexperience and education Damanpour (1991)argues that a diversity of skills and experiencepermits more differentiated units from which
collaborative relationships can emerge and addsignificant value to innovation outcomesAlthough Baldridge and Burnham (1975) arguethat demographic characteristics (sex agecosmopolitanism education) do not appearto influence innovative behaviour amongindividuals more recent research suggests thatinnovating groups should comprise individualswith a mix of these characteristics (Amabile1998) Members with high levels of educationand self-esteem increase the effectiveness ofRampD project teams (Kessler and Chakrabarti1996) and individuals of greater educationalattainment with diverse backgrounds havebeen associated with more innovative teams(Bantel and Jackson 1989)
The propensity of an individual to innovatehas received considerable attention though itis difficult to measure Kirton (1976) devel-oped a 32-item questionnaire designed toestablish an individualrsquos position on anlsquoadaptorndashinnovatorrsquo continuum Scott andBruce (1994) operationalized an lsquoinnovativebehaviour measurersquo consisting of six itemsagainst which subordinates are measured byhierarchical superiors Finally the InnovationPotential Indicator (Patterson 2003) providesa framework for investigating individualbehaviours that might promote or inhibitinnovation in the workplace This measureis constructed around four dimensions anindividualrsquos motivation to change challeng-ing behaviour preferred approach to workand preference for tried and trustedmethods of work as opposed to doing thingsdifferently
Facilities or physical resources is a broadcategory that captures a range of inputs frombuildings to computer equipment Physicalresources can be counted or measured indollar terms However one important generalmeasure of facilities which cannot be so read-ily measured is slack Slack resources orunused capacity can be regarded as an import-ant catalyst for innovation Slack allowsfailures to be absorbed provides the opportu-nity for diversification and fosters a cultureof experimentation and protects against the
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uncertainty of project failure (Kimberly 1981)An alternative view however suggests a nega-tive relationship slack can become synonymouswith waste and represents a cost that should beeliminated (Nohria and Gulati 1996) Typicallyfinancial measures of slack are used (Daman-pour 1991) although Miller and Friesen (1982)use both financial and human measures ofslack
Use of systems and tools is an importantinput to the innovation process (Bessant andFrancis 1997 Cooper et al 2004) Measuresidentified tend to relate to whether or not theorganization has or makes use of formal sys-tems and tools in support of innovation Thesecan be of various sorts such as the availabilityand use of tools and techniques for promotingcreativity (Amabile 1998 Rickards 1991Rochford 1991 Thompson 2003) or the avail-ability and use of systems of quality controlranging from informal methods to specifictechniques such as total quality management(TQM) (Souitaris 2002) While tool use canbe evaluated on a binary or degree of use scalethere is little other than Chiesa et alrsquos (1996)technical innovation audit that attempts tomeasure whether or not tool use is consistentwith a firmrsquos innovation requirements and isintegrated into its processes
We conclude that while there has been aconcentration on financial measurement ofinputs there is less emphasis on measuringother aspects of the category Even withinfinancial measures there are few that attemptto determine the adequacy of funding for theinnovation project Further most measuresreflect a preoccupation with RampD and NPDrather than other forms of innovation (egprocess business model) In particular thesofter inputs of skills and knowledge arepoorly represented by measurement instru-ments Tacit knowledge input appears not tobe well captured by extant measures and nomeasures of appropriate skill levels have beendeveloped This is an imbalance that needsto be addressed by further work to developa balanced set of measures covering allsub-dimensions of the input category
Knowledge Management
Knowledge absorption an organizationrsquosability to identify acquire and utilize externalknowledge can be critical to a firmrsquos success-ful operation (Zahra and George 2002) Theconcept of knowledge has received muchattention in recent years (eg Blackler 1995McAdam 1999 Nonaka 1991) and has beenasserted to play a critical role in the innova-tion process (Hull et al 2000) Knowledgemanagement is concerned with obtainingand communicating ideas and informationthat underlie innovation competencies andincludes idea generation absorptive capacityand networking Knowledge managementcovers the management of explicit andimplicit knowledge held by the organization(Davis 1998 Nonaka 1991) as well as theprocesses of gathering and using informa-tion The three areas within knowledgemanagement of importance for innovationmanagement identified in the literatureare idea generation knowledge repository(including the management of implicitand explicit knowledge) and informationflows (including information gathering andnetworking)
The importance of generating sufficientnumbers of ideas has been well established inthe literature Ideas are the raw materials forinnovation it is relatively inexpensive togenerate and screen ideas yet this can havesignificant impact on ultimate success orfailure (Cooper 1988) Several authors haveconceptualized the early stages of the innova-tion process as a somewhat fuzzy period(Kim and Wilemon 2002 Moenaert et al1995 Verworn 2002) including opportunityidentification opportunity analysis idea gen-esis idea selection and concept development(Koen et al 2001)
At the commencement of the innovationprocess when ideas are generated andexplored measures tend mostly to be quanti-tative inexpensive and rapid As the processprogresses and uncertainties with regard toappropriateness feasibility and business case
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are reduced measurement approaches becomeincreasingly qualitative and possibly morecostly and time-consuming to deploy Meas-ures imply an assumption that the objective isto generate as many ideas as possible throughthe use of generative tools Several measuresattempt to count the number of ideas gener-ated in a period (cf Chiesa et al 1996 Leeet al 1996) while others probe the extent towhich organizations are using different gener-ative tools and techniques (cf Cebon andNewton 1999 Chiesa et al 1996 Loch et al1996 Rochford 1991 Szakonyi 1994Thompson 2003)
If knowledge is fundamental to innovationthen it should be possible to measure theaccumulated knowledge of the firm itsknowledge repository One aspect of innova-tion relates to combinations of new andexisting knowledge which privileges the con-tribution of internal and external knowledgeand the mechanisms by which it flows intoand within an organization (Galunic andRodan 1998 Nonaka and Takeuchi 1995 Pittand Clarke 1999) Central to this perspectiveis the idea of lsquoabsorptive capacityrsquo the firmrsquosability to absorb and put to use new knowledgeand involving lsquoan ability to recognize thevalue of new external knowledge assimilateit and apply it to commercial endsrsquo (Cohenand Levinthal 1990 128) Absorptive capacityresults from a prolonged process of invest-ment and knowledge accumulation within thefirm and its development is path dependentFirms with strong absorptive capabilities aremore likely to acquire knowledge and learneffectively from outside Higher levels ofabsorptive capacity appear to be positivelyrelated to innovation and performance (Chen2004 Tsai 2001) but it is impossible topredict what is the lsquorightrsquo level of investmentin absorptive capacity for any individualfirm (Cohen and Levinthal 1990) meaningthat it is not readily amenable to interna-tional benchmarking However the conceptualdevelopment and empirical studies infer orimply a range of organizational knowledgestates
Several quantitative approaches have beendeveloped for the measurement of importedtangible knowledge The most frequently usedapproach counts numbers or value of patentsbrought in However this restricts its applica-tion to contexts in which patents are signifi-cant and overlooks those industries wherethey do not feature For a while patent datawas widely accepted as a proxy measure forinnovation More recently however the valid-ity of patent statistics has been questionedpatents vary in their utility for organizationsand so their input value to the innovation can-not adequately be judged in terms of a cashprice (Griliches 1990 Pakes and Griliches1980) Only a few studies have attempted todevise measures for other contexts For exam-ple Kleinknecht (1987) constructed a ques-tion designed to capture the informal hours ofRampD work that are hypothesized to be hiddenwithin other activities or to take place outsideformal working hours
Patents represent codified knowledge butthe importance of tacit knowledge to organi-zational innovation is underscored in theresource-based approach (Barney 1991 Galu-nic and Rodan 1998 Grant 1991 Leonardand Sensiper 1998) Tacit knowledge is animportant resource when it is has value for theorganization is difficult for competitors toimitate is rare and can be operationalized bythe organization Of particular importance isits acquisition and use (Bess 1998) It can beacquired opportunistically or by a deliberatepolicy of search
Tacit knowledge is notoriously difficult tomeasure in organizational research andmethodologies for its investigation andmeasurement can be complex Ambrosiniand Bowman (2001) for example proposean approach that consists of causal mappingfacilitated by story-telling and the use of meta-phor Other attempts to capture tacit know-ledge and group memory have been reportedby Oliver et al (1999) At the level of theorganization Sveiby (1997) suggests thedifference between market value and netbook value as an indicator of the value to an
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Innovation management measurement A review
organization of intangible knowledge assetsThe first method is resource intensive whilein the second it is not clear how much of theidentified value can be attributed to inputs intoinnovation Tacit knowledge input appears notto be well captured by extant measures
Information flows into and within the firmare important in sparking ideas and in allow-ing the development of innovative conceptsThree measurement approaches to informa-tion flows can be identified first measures ofthe linkages that the innovating group main-tains with external organizations and sourcessecond measures of internal informationgathering processes Third measures of cus-tomer information contacts
Linkage measures determine whether or notthe organization has and maintains externallinkages with other organizations or sourcesof information eg through participation inresearch projects university links or attend-ance at trade shows (Atuahene-Gima 1995Tipping and Zeffren 1995) These are princi-pally dichotomous measures only infre-quently is there a measure that implies somesort of qualitative assessment of the nature ofthe linkages Cebon and Newtonrsquos (1999)measures suggest that quality and diversity oflinkage might be an important factor forexample visits to exemplary projects
Statistics on the use of formal methods ofinformation gathering such as project reviewsand the use of technical reports (Oliver et al1999) provide a frequently used approach tothe measurement of information gatheringCebon and Newton (1999) suggest bench-marking information gathering against com-petitorsrsquo activities to gauge how well theactivity is performed Another important areaabout which a firm needs understanding andinformation is customers Atuahene-Gima(1995) lists a series of measures specificallyaimed at examining the extent to which organ-izations make use of customers as a source ofinformation and include measures assessingthe adequacy of information and customercontact time (Lee et al 1996 Miller andFriesen 1982)
Innovation Strategy
Ramanujam and Mensch (1985) defineinnovation strategy as a timed sequence ofinternally consistent and conditional resourceallocation decisions that are designed to fulfilan organizationrsquos objectives Activities mustbe consistent with an overarching organiza-tional strategy that implies that managementmust take conscious decisions regardinginnovation goals (Sundbo 1997) Innovationstrategy is generally understood to describe anorganizationrsquos innovation posture with regardto its competitive environment in terms of itsnew product and market development plans(Dyer and Song 1998) This techno-centricview predominates in the literature andoverlooks those innovative initiatives that areinternally focused (for example the adoptionof new management techniques and prac-tices) In the conceptualization of innovationstrategy as an articulation of the organizationrsquoscommitment to the development of productsthat are new to itself andor to its marketsand because strategy does not operate in avacuum but requires a structural context twocomplementary approaches to its measure-ment which have been described as objectiveand subjective (Li and Atuahene-Gima 2001)can be identified
In the literature scholars principally haveadapted measures from strategic managementresearch to explore the existence nature andextent of innovation strategy Richard et al(2003) use three scale items drawn from thestrategic posture scale devised by Covin andSlevin (1989) who in turn draw on Milesand Snowrsquos (1978) lsquoprospectorsrsquo and Mintz-bergrsquos (1978) lsquoentrepreneurialrsquo organizationsfor their assessment of bank innovativenessThese studies classify organizations based ontheir approach to innovation using classifica-tions that are ontologically grounded in theassumption that innovation orientation can bedeciphered from quantitative interpretationsof new product and market activity
Other objective evidence of an organizationrsquosinnovation strategic posture may include many
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of the input measures (such as level of RampDexpenditure) that we have already discussedIt is argued that it is not their absolute magni-tude but their magnitude relative to industryrivals that is significant As has been notedalthough these may be useful indicators ofcommitment or intent they could mask pro-cess inefficiencies However OrsquoBrienrsquos (2003)observation that an interaction betweenintended strategy and slack will influence per-formance suggests that process inefficienciesare less likely to occur where an innovationstrategy is not merely nominally adopted butis embedded in the culture behaviours andactions of the organization
In Li and Atuahene-Gimarsquos (2001) termsthe evidence for an embedded innovationstrategy is subjective and may include evalua-tions of an organizationrsquos emphasis on NPDsuch as resource allocation Saleh and Wang(1993) describe this as consisting of threemain components risk-taking proactivenessand persistent commitment to innovationThese include top management responsibilityfor innovation within the organization includ-ing specifying and communicating a directionfor innovation Cooper (1984) demonstratedthat new product performance is largelydecided by the strategy that top managementadopts The key components are the linkbetween innovation strategy and overall busi-ness goals (strategic orientation) and theprovision of leadership to make innovationhappen via a strong vision (Pinto and Prescott1988) for innovation a long-term commit-ment to innovation and a clear allocation ofresources (Cooper et al 2004) This distinc-tion between strategic planning or orientationand strategic vision or leadership is frequentlyreplicated in the literature
Two distinct types of strategic orientationmeasures can be identified in the literatureFirst those that measure whether the organi-zation has an innovation strategy this can beevaluated in several ways such as commit-ment to differentiated funding (White 2002)explicit expression (does the organizationhave an innovation strategy) (Miller and
Friesen 1982) and identifiable roles for newproducts and services (Cooper and Klein-schmidt 1990 Geisler 1995 Hauser andZettelmeyer 1997 Tipping and Zeffren 1995)The second type of measure regards strategyas a dynamic instrument that shapes andguides innovation in the organization Thesemeasures assume that strategy exists and asksquestions about how effective it is in shapingand guiding lsquoare structures and systemsalignedrsquo (Bessant 2003) lsquodo innovation goalsmatch strategic objectivesrsquo (Tipping andZeffren 1995) and further similar measures ofstrategic fit (Bessant 2003)
From a strategic leadership perspectiveDougherty and Cohen (1995) found thebehaviour of senior managers to be influentialThose chief executives most likely to makeinnovation happen are those with a clearvision of the future operation and direction oforganizational change and creativity (Shin andMcClomb 1998) Senior management areresponsible for developing and communicat-ing a vision for innovation being supportiveand adopting an attitude tolerant to changeand championing the notion of innovationwithin the organization Managerial toleranceto change creates the right climate for theimplementation stage of innovation whereconflict resolution might be necessary(Damanpour 1991)
Managerial attitude is also reflected innorms or support for innovation These are theexpectation approval and practical support ofattempts to introduce new and improved waysof doing things in the work environmentMeasures are mostly qualitative in nature andexplore perceptions mostly about the extentto which respondents recognize factors to bepresent (or absent)
Relatively few measures of championingand leadership have been uncovered in thisreview other than those that simply ask thequestion whether or not one or other existsperhaps through evidence of signs of commit-ment in annual reports (Chiesa et al 1996) orlevels of concern of top management (Coughlanet al 1994) or whether or not an individual
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Innovation management measurement A review
has been physically assigned to a particularrole (Souitaris 2002) Shane et al (1995) pro-vide a series of reflective questions designedto allow organizations to determine for them-selves their expectations and understandingof the role of champion For example lsquoto whatextent should the organization make it possiblefor the people working on an innovation tobend the rules of the organization to developthe innovation or be allowed to bypass certainpersonnel procedures to get people committedto an innovationrsquo
It must be emphasized that the dominantperspective on strategy in the literature isone that examines the relationship betweenstrategy and performance However a smallnumber of studies have examined the natureof the transitions of these states as organiza-tions adopt and embed an innovation strategyThis sub-section of the literature is under-pinned by the assumption that firms that fol-low innovation strategies differ from otherfirms in several respects It is apparent thatmore innovative firms adopt different opera-tional strategies to accommodate flexibilityand quality capabilities (Alegre-Vidal et al2004) have different capital managementpractices to facilitate slack resources (OrsquoBrien2003) are more tolerant of internal conflict insupport of creativity (Dyer and Song 1998)and maintain organizational structures that arein the lsquointermediate zone between order anddisorderrsquo (Brown and Eisenhardt 1997 22)What is clear from this literature is that anytransition towards an innovation strategy willnecessarily take several years because of theresources and energy that are necessary beforesuch a transformation can even be triggered(Hope Hailey 2001)
Organizational Culture and Structure
Burns and Stalker (1961) described a contin-gency approach to innovation managementlater developed to include concepts of func-tional differentiation specialization and inte-gration (Lawrence and Lorsch 1967) whichsuggests that environmental change prompts a
realignment of the fit between strategy andstructure That is to perform effectively anorganization must be appropriately differenti-ated specialized and integrated Pugh et al(1969) argued that the structure of an organi-zation is strongly related to the context withinwhich it functions Our closing discussion inthe previous section that the characteristics oforganizations following an innovation-focusedstrategy will differ from those that do not isconsistent with this contingency approach andin the following we focus on those dimen-sions of culture and structure that have beenidentified to differentiate between innovativeand non-innovative organizations
Organizational culture and structure concernthe way staff are grouped and the organiza-tional culture within which they work Therehas been considerable work on the situationaland psychological factors supportive of inno-vation in organizations Indeed it has beenwidely demonstrated that the perceived workenvironment (comprising both structural andcultural elements) does make a difference tothe level of innovation in organizations (Ama-bile et al 1996 Ekvall 1996) Creative andinnovative behaviours appear to be promotedby work environment factors (Mathisen andEinarsen 2004) Indeed it is clear that organ-izations can create environments in whichinnovation can be encouraged or hampered(Dougherty and Cohen 1995 Tidd et al1997) A common theme is that of the poly-chronic organization ndash one with the capacityto be in two states at once (Becker andWhisler 1973) Shepard (1967) describes thisas a two-state organization manoeuvreingbetween loose and tight and Mitroff (1987)as business-as-usual versus business-not-as-usual More prosaically this means organiza-tions need to be able for example to providesufficient freedom to allow for the explorationof creative possibilities but sufficient controlto manage innovation in an effective and effi-cient fashion
Ernst (2002) specifies a range of genericcharacteristics for the dedicated project groupassigned the innovation task multidisciplinarity
copy Blackwell Publishing Ltd 2006 33
March 2006
dedicated project leader inter-functional com-munication and co-operation qualificationsand know-how of the project leader teamautonomy and responsibility for the processAnd these factors are echoed throughout theliterature Rothwell (1992) refers to them aslsquocorporate conditionsrsquo Chiesa et al (1996)lsquoenabling processesrsquo and OrsquoReilly and Tushman(1997) lsquonorms for innovation and changersquoHowever despite their perceived importancethere is little guidance on how to measurethem
Volberda (1996) developed a conceptualmodel of alternative flexible organizationalforms that are argued to initiate or respondbetter to different types of competition Yet inspite of its importance there is relatively littleevidence of extant measures of flexibility inthe literature Rothwell (1992) and Ekvall(1996) propose a range of foci for measures oforganizational and production flexibility suchas lsquocorporate flexibility and responsiveness tochangersquo Coughlan (1994) considers the flexi-bility of resource allocation Several measuresof personnel flexibility are evident such aslsquothe adaptiveness of RampD personnel to tech-nology changesrsquo (Lee et al 1996) and lsquothewillingness to try new procedures and toexperiment with change so as to improve asituation or a processrsquo (Abbey and Dickson1983) At the level of the firm Liao et al(2003) introduce a similar construct ndash lsquoorgan-izational responsivenessrsquo
Organizational complexity the amount ofspecialization and task differentiation report-edly have a positive relationship (Damanpour1996) though Wolfe (1994) argues that it mayfavour initiation at the expense of implemen-tation Administrative intensity that is theratio of managers to total employees favoursadministrative innovation (Damanpour 19911996) but possibly at the cost of other pro-duct or technological innovations (Doughertyand Hardy 1996) Centralization the concen-tration of decision-making authority at the topof the organizational hierarchy and formaliza-tion the degree of emphasis on following rulesand procedures in role performance have both
been shown to have a negative impact on organ-izational innovation (Burns and Stalker 1961Damanpour 1991) Indeed rigidity in rulesand procedures may prohibit organizationaldecision-makers from seeking new sources ofinformation (Vyakarnam and Adams 2001)
Underlying the concept of the workplaceenvironment are issues related to the manage-ment of human resources and the creation ofa culture or climate in which individuals per-ceive innovation to be a desired and supportedorganizational objective There has been con-siderable empirical work on organizationalclimates supportive of the innovation processand several measurement instruments havebeen developed which Mathisen and Einarsen(2004) review The Team Climate Inventory(TCI) (Anderson and West 1996 1998) andthe KEYS instrument for assessing the workenvironment for creativity (Amabile et al 1996)have been found to be robust and rigorous
The TCI has been applied and validated inseveral studies (Agrell and Gustafson 1994Anderson and West 1998 Kivimaumlki et al1997 West and Anderson 1996) Replicationstudies using the TCI have found it canexplain a large part of the variance in teamsrsquoinnovative performance (Agrell and Gustafson1994) The TCI is based around four mainfactors participative safety (how participativeis the team in decision-making proceduresand how psychologically secure do teammembers feel about proposing new andimproved ways of doing things) support forinnovation (the degree of practical support forinnovation attempts contrasted with the rheto-ric of professed support by senior manage-ment) vision (how clearly defined sharedattainable and valued are the teamrsquos objectivesand vision) and task orientation (the com-mitment of the team to achieve the highestpossible standards of task performance includ-ing the use of constructive progress monitor-ing procedures) (Anderson and West 1996)Kivimaumlki et al (1997) suggested a fifth factorlsquointeraction frequencyrsquo relating to the regularityof contact and communication within theproject team
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Innovation management measurement A review
There is general agreement about theimportance of individual and group autonomyin the innovation process (Amabile 1998)Zien and Buckler (1997) emphasize the needfor freedom to experiment and the creation ofsafe havens without which innovation out-come might be constrained Measures ofautonomy mix both qualitative and quantita-tive approaches For example lsquothe degree offreedom personnel have in day-to-day operat-ing decisions such as when to work andhow to solve job problems including freedomfrom constant evaluation and close supervi-sionrsquo (Abbey and Dickson 1983) or lsquopercent-age of RampD portfolio with explicit businessunit andor corporate business managementsign-offrsquo (Tipping and Zeffren 1995) Addition-ally several authors have proposed generalmeasures of autonomy such as lsquofreedom tomake operating decisionsrsquo (Abbey and Dick-son 1983) or lsquodegree of empowermentrsquo (deLeede et al 1999 Tipping and Zeffren1995)
Morale and motivation are dimensions ofthe innovative organization that can be meas-ured as they pertain to individuals ndash lsquotheextent to which personnel are well rewardedrsquo(Abbey and Dickson 1983) to groups ndash lsquoourreward system is more group-based thanindividual-basedrsquo (Parthasarthy and Hammond2002) and to the organization as a whole ndashlsquothe degree to which the organization attemptsto excelrsquo (Abbey and Dickson 1983) Aspectsof morale and motivation that have beenmeasured include trust (Miller and Friesen1982) and job satisfaction which has beenmeasured by Keller (1986) on a 20-item scale
Organizational culture may include a sharedvision and it has been argued that the clearerthe vision the more effective it is as a facilitatorof innovation as it enables focused develop-ment of new ideas that can be assessed moreprecisely (West 1990) Pinto and Prescott(1988) found that the only factor to have pre-dictive power in terms of potential for successat all stages of the innovation process (con-ception planning execution and termination)was having a clearly stated missionvision
while West (1990) contends that the quality ofinnovation is partly a function of visionKeller (1986) adopts Kirtonrsquos (1976) 32-itemadopterndashinnovator inventory to determineindividual and team orientation to innovationVision is operationalized in the team climateinventory (cf Agrell and Gustafson 1994Anderson and West 1996 1998 West andAnderson 1996) and is deconstructed into aseries of sub-dimensions such as clarity shared-ness attainability and value with regard toteam objectives
Another aspect of culture is the propensityto take risks Saleh and Wang (1993) describethis as a willingness to confront risky oppor-tunities and tolerate failure and learn fromdoing so rather than recklessly gamblingSimilarly West (1990) demonstrated thathigher levels of participative safety facilitateinnovation Participative safety is non-judgmental supportive and characterized bysocio-emotional cohesiveness The attractive-ness of the organization as a place to workand undertake innovative activities is used byGeisler (1995) as an indicator of the climatefor innovation measured by numbers of can-didates applying for positions and the ageprofile of scientists and engineers Keller(1986) offers a slightly different perspectiveon participative safety with the constructlsquogroup cohesivenessrsquo which he operational-izes using an established five-item measure
This review has described a wide variety ofmeasures proposed for organizational cultureand structure Unlike some other aspects ofinnovation management this area has receivedextensive measurement attention HoweverHolbek (1988) argues that innovating organi-zations must adopt contrasting structures andclimates as they move from the initiation tothe implementation stages of innovationChesborough and Teece (1996) and Burns andStalker (1961) argue that there is a relation-ship between organizational design and typeof innovation It is a significant gap in innova-tion measurement that there appears to be nomeasures that adequately capture or articulatethis sense of structural shift
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March 2006
Portfolio Management
The importance of portfolio management tosuccessful product innovation has recentlyemerged as a key theme in the literature Itis important because of the rapidity at whichresources are consumed in the innovationprocess and the need for these to be managed(Cebon and Newton 1999) The effectivenesswith which an organization manages its RampDportfolio is often a key determinant of itscompetitive advantage (Bard et al 1988) Thefocus of portfolio management is on makingstrategic technological and resource choicesthat govern project selection and the futureshape of the organization (Cooper et al 1999)The problems of allocation of resources evalu-ation selection and termination of projects inachieving the optimal portfolio have beenextensively investigated The models all havethe objective of devising means to allocateresources to projects to obtain the optimalbalance in the product development portfoliothat is arriving at a portfolio that optimizesthe trade-off between returns and risks
The process of selecting innovation projectsrequires evaluation and resource allocationunder uncertain conditions It is argued that asystematic process guided by clear selectioncriteria can help optimize the use of limitedresources and enhance an organizationrsquoscompetitive position (Hall and Nauda 1990)The earliest models used return on investmentas the primary decision criteria (Bard et al 1988)Following this increasingly sophisticatedmathematical tools were developed to resolvewhat Schmidt and Freeland (1992) describe asthe constrained optimization problem that isto maximize the output (according to specifiedcriteria) from a subset of available inputsThese project selection models lsquohave beenvirtually ignored by industryrsquo (Schmidt andFreeland 1992 190) Part of the reason forthis is the inherent complexity of some ofthese models but also that they fail to takeinto account organizational decision andcommunication processes More recentlymodels have tried to take account of these
more qualitative factors involved in decisionprocesses
Scoring models require respondents tospecify the merit of any project proposalaccording to a set of a priori criteria whichmay be objective or subjective (Hall andNauda 1990) Economic and benefit modelsattempt to compute the cost benefit or finan-cial risk of pursuing a specific project whilemathematical programming approaches seekto optimize some objective function(s) subjectto specified resource constraints Algorithmsof varying complexity exist requiring moni-toring and significant data entry and whilemany are conceptually attractive surveys donot show widespread utilization of thesetechniques (Hall and Nauda 1990) Theseapproaches are all based on financial meas-ures such as internal rate of return net presentvalue and return on investment At the otherend of the spectrum qualitative approachessuch as peer review and mental checklistsrely on subjective perceptions and measuresof portfolio balance (Cooper et al 2001Henriksen and Traynor 1999)
Cooper et al (1999) find that best performersuse explicit formalized tools and consist-ently apply them to all projects considered tobelong to a portfolio A series of measures canbe identified that evaluate the whole portfolioof innovation projects to answer questionssuch as lsquois it balanced in terms of quantity ofshort- and long term-projectsrsquo and lsquois there abalance between high and low risk projectsand large and small projectsrsquo (Brenner 1994Cooper et al 2001) Another set seeks to iden-tify the extent to which portfolio evaluationmeasures are formalized within the organiza-tionrsquos processes (Cebon and Newton 1999Chiesa et al 1996 Farrukh et al 2000 Millerand Friesen 1982) Yet another approach is toview project evaluation and selection as anorganizational capability and attempt to deter-mine a level of proficiency (Szakonyi 1994)Finally there is a series of post hoc measuresof the appropriateness of project selections inthe light of results and alignment with busi-ness objectives (Lee et al 1996)
36 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Project Management
Project management is concerned with theprocesses that turn the inputs into a marketa-ble innovation The innovation process iscomplex comprising a myriad of events andactivities some of which can be identified as asequence and some of which occur concur-rently and it is clearly possible that innova-tion processes will differ to some degreeacross organizations and even within organi-zations on a project-by-project basis Havingan efficient process that is able to manage theambiguity of the innovation is universally agreedto be critical to innovation (Globe et al 1973)
Various approaches have been taken tomodelling innovation processes as a series ofevents (Zaltman et al 1973) as a social interac-tion (Voss et al 1999) as a series of transactions(Nelson and Winter 1982) and as a process ofcommunication (Farrukh et al 2000) The his-tory of project management research is partlycharacterized by a debate regarding the extentto which events and activities within the processoccur in linearly sequential discrete identifiablestages (Zaltman et al 1973) or whether eventsare more disorganized (King 1992) or evenchaotic (Koput 1997) However despite thesedifferent viewpoints there are a number ofcommon elements that can be summarized asthe major components of the innovation projectmanagement These are project efficiencytools communications and collaboration
Several studies make efforts to measureproject management efficiency mostly in theform of comparisons between budget and actual(project costs project duration revenue fore-casting) Another measure of project manage-ment success is speed Innovation speed hasbeen positively correlated with product qual-ity or the degree to which it satisfies customerrequirements measures include speed (Hauserand Zettelmeyer 1997) performance againstschedule (Chiesa and Masella 1994) and dura-tion of the process (Cebon and Newton 1999)
To achieve efficiency it is widely recom-mended that organizations seeking to innovateshould establish formal processes for innovat-
ing and make use of tools and techniquesthat may facilitate innovative endeavours Thestage-gate process (Cooper 1990) is possiblythe most familiar of these but other method-ologies for innovation project managementexist including Phased Development Productand Cycle-time Excellence and Total Design(see Jenkins et al (1997) for a discussion)These methodologies have in common theseparation of the product development processinto structured and discrete stages which eachhave milestones in the form of quality controlcheckpoints at which stopgo decisions are madewith regard to the progress of the project Thesehighly structured approaches to the manage-ment of the innovation process began toemerge in the 1990s (Veryzer 1998) The useof structured tools and processes can bemeasured by project process evaluations forexample the use of a formal problem-findingproblem-solving cycle (Bessant 2003) the useof formal post-launch evaluation procedures(Atuahene-Gima 1995) or the use of certifiedprocesses (Chiesa et al 1996) These rathergeneral process measures have been supple-mented by measures of the use of specificinstruments and tools such as interactiveCAD or CAM (Maylor 2001) or the use ofcomputer-integrated manufacturing processes(Parthasarthy and Hammond 2002) but wenote that these measures betray the technologicaland NPD heritage that underpins many of theinnovation measures identified in this reviewEquivalents for service industry public ornot-for-profit sector innovations are somewhatlacking in the literature and constitute aresearch gap
Communications are important in projectmanagement Damanpour (1991) demon-strated the existence of a positive relationshipbetween internal communication and innova-tion Internal communication facilitates thedispersion of ideas within an organizationincreases the diversity and also contributes tothe team lsquoclimatersquo Communication can bemeasured by various integration mechanismseg committees numbers of meetings andcontacts (Damanpour 1991) There are also
copy Blackwell Publishing Ltd 2006 37
March 2006
measures of external communications whichtend to focus on whether communication istaking place the level at which it occurs andwith whom (Cebon and Newton 1999 Leeet al 1996 Rothwell 1992 Souitaris 2002)These measures of internal and external com-munication in the literature are based on bothsubjective evaluations and objective frequencycounts Subjective measures include lsquowe alwaysconsult supplierscustomers on new productideasrsquo (Parthasarthy and Hammond 2002) andlsquodegree of organization members involved andparticipating in extra-organizational professionalactivitiesrsquo (Damanpour 1991) Objective countsinclude (Damanpour 1991) lsquoextent of commu-nication amongst organizational units or groupsmeasured by various integrating mechanismssuch as numbers of committees and frequencyof meetingsrsquo (Anderson and West 1998)lsquofrequency of formal meetings concerningnew ideasrsquo (Souitaris 2002 Szakonyi 1994)lsquohow well do the technical and finance peoplecommunicate with one anotherrsquo
It is widely recognized that collaboratingwith suppliers (Bessant 2003) and customers(von Hippel 1986) can also make a significantcontribution to the innovation processMeasures of collaborative working includethe use of guest engineers (Maylor 2001) thepercentage of projects in co-operation withthird parties (Kerssens-van Drongelen andBilderbeek 1999) and the extent to whichdecision-making at top levels is characterizedby cross-functional discussions (Miller andFriesen 1982) In addition Jassawalla andSashittal (1999) identify some characteristicsof internal collaboration ie that teams arecharacterized by their mindfulness levels ofat-stakeness synergy and transparency butthey do not suggest how these aspects mightbe measured which constitutes a furtherresearch gap
Commercialization
Commercialization can be considered to bethe second of the two phases in Zaltman et alrsquos(1973) conceptualization of the innovation
process that is lsquoimplementationrsquo This canmean taking an innovation to market (Chakra-vorti 2004) but may also include convincingproduction managers to adopt a series of newtechniques available to them (Single andSpurgeon 1996) Indeed the successful intro-duction of new products and services intomarkets is important for the survival andgrowth of organizations Kelm et al (1995)regard commercialization as a transitionalphase in which the organization becomesless reliant on its technological capabilities(important during the activities of initiation)but more dependent on market dynamicsCommercialization is concerned with makingthe innovative process or product a commer-cial success it includes issues such as market-ing sales distribution and joint venturesWhile technical capabilities are important forthe early stages of the innovation process anddevelopment activities for the launch andimplementation stage it is marketing capabili-ties (market investigation market testingpromotion etc) that are significant (Calantoneand di Benedetto 1988 Globe et al 1973)Verhaeghe and Kfir (2002) consider aspectsof commercialization under the headings ofmarket analysis and monitoring reaching thecustomer and market planning
Firm-level measures of the launch or com-mercialization process appear to be relativelythin In their description of the RampD processBalachandra and Brockhoff (1995) character-ize the commercialization stage as requiringlsquobig bucksrsquo market reviews and organiza-tional commitment Most measures appear tobe not much more sophisticated than thisMeasures are frequently restricted to numbersof products launched in a given period (egYoon and Lilien 1985) There is thoughsome focus on market analysis and monitor-ing (Verhaeghe and Kfir 2002) Song andParry (1996) employ a set of measures oflaunch proficiency (salesforce distributionaland promotional support) that directly addressthe lsquoadequacyrsquo of the organizationrsquos facilities inthese areas as do Avlonitis et al (2001) Andthere is a limited mention of the commercial
38 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
intentions of an organizationrsquos competitors(Calantone and di Benedetto 1988) Thethemes of proficiency of personnel in this area(eg Atuahene-Gima 1995 Cebon and New-ton 1999) of adherence to a commercializa-tion schedule (eg Griffin and Page 1993) andof formal post-launch reviews (Atuahene-Gima 1995 von Zedtwitz 2002) can also befound in the literature
Even in the work that addresses post-project reviews very little attention is directedtowards measuring innovation launch orcommercialization However this comes aslittle surprise as Hultink et al (2000) recentlyobserved that little work has been done in thearea perhaps because at least in the innova-tion literature launch activities appear to beconsidered the domain of other specialistsparticularly marketers and the process is seenas separate from innovation In their studythey investigated launch decisions associatedwith success for consumer and business-to-business products Much of the literature thatconsiders launch and commercialization doesso from the viewpoint of the adopter andassesses rates of adoption and diffusion ofinnovations over time across populations(Kessler and Chakrabarti 1996 Van DenBulte 2000)
The area of commercialization appears tobe the least developed of the issues involvedin innovation management This is a huge gapbecause without this last step the previoussteps of assembling inputs project manage-ment etc will not result in a commerciallyviable outcome for the firm We believe thatthis area of innovation is in urgent need offurther development from both theory andmeasurement viewpoints
Discussion
Innovation management measurement is acritical discipline for both academics andpractitioners The capacity of organizations toinnovate is determined by multiple factors thatrelate both to their own internal organizationand to their market environment (Rothwell
et al 1974) and the task of generating andthen converting ideas into usable and market-able products requires high levels of inter-functional co-ordination and integration Thispaper opened with the general observationthat innovation measurement does not appearto take place routinely within managementpractice and that where it does it tends tofocus on output measures Further from therelatively small number of empirical studiesof measurement in practice measurement ofinnovation management appears to be under-taken infrequently in an ad hoc fashion andrelies on dated unbalanced or under-specifiedmodels of the innovation management phe-nomenon This suggests that a large part ofthe contemporary conceptualization of theinnovation management phenomenon is over-looked in practitionersrsquo measurement prac-tices and consequently that opportunities forthe more efficient and effective managementof the innovation process are not realizedSome possible reasons for this state of affairsare failure of academics to communicate ade-quately inconsistency inaccessibility andcomplexity of measures and poor synthesisand packaging
Following a review and synthesis of theliterature we proposed a seven-dimensionalconceptualization of the innovation manage-ment phenomenon and applied it to an exam-ination of the measurement problem Throughthe application of this framework to their ownparticular context it is suggested that practi-tioners will be able to conduct an evaluationof their own innovation management activityidentify gaps weaknesses or deficiencies andalso improvement potential Further it ishoped that organizations applying the frame-work will be able to tease out areas whereinnovation is only nominally adopted in theirprocesses and identify areas where attentionand resources might be focused
From the perspective of its management itis no longer sufficient to treat innovation as alinear process where resources are channelledat one end from which emerges a new prod-uct or process The measurement framework
copy Blackwell Publishing Ltd 2006 39
March 2006
presented in Table 2 shows the breadth andvariety of elements of innovation managementthat ideally need to be measured There havebeen several studies that have investigated thelimitations of various approaches to measure-ment (eg Werner and Souder 1997) and ofspecific measures (eg Trajtenberg 1990) asthey relate to the practice of innovation Thechoice of an appropriate RampD measurementmetric depends on the userrsquos needs in terms ofcomprehensiveness of measurement type ofRampD being measured available data andamount of effort the user can afford to allocateto the exercise Nonetheless the commonciting across various papers of the measuresnoted in the innovation management frame-work presented here suggests that a base setof innovation management measures isimplicitly present in the literature eventhough they may be fragmented in appearanceand presentation By pulling together theinnovation management framework fromdiverse sources this paper aims to bring suchissues into the open and identify relevantresearch gaps Table 2 can be viewed as thebasis for a balanced scorecard (Kaplan andNorton 1992) for innovation managementthat is as a balanced set of areas that need tobe measured in order to gain insight into anorganizationrsquos holistic ability to manage inno-vation Such multidimensional approaches tomeasurement have been found in other areasof management to be an improvement on sim-ple one-dimensional measures and to be ableto capture both short- and long-term aspectsof value creation in the firm (Phelps 2004)
We have identified a large number of meas-ures and approaches in a variety of innovationmanagement areas and we have constructed ageneric set of innovation management meas-urement areas to act as a framework for bal-anced measurement However in several ofthese areas measurement gaps have beenidentified These gaps are of two types valid-ity gaps and omission gaps Validity gaps arisewhere there is insufficient evidence that pro-posed measures actually do capture drivers oroutputs of innovation management for example
we have noted the objections to counts ofpatents or increasing expenditure on RampD beingused as measures of innovative organizationsSimilarly there is an absence of evidence thatthe large number of subjective perceptions ofinnovation management practices proposed(lsquowe do Arsquo lsquowe are good at Brsquo) actually relateto innovation management performance
Omission gaps occur where the importanceof an aspect of innovation management is sup-ported in the literature but measures for thisaspect are lacking Omission gaps are particu-larly prevalent in the elements of innovationmanagement such as knowledge managementinnovation strategy and commercializationthat do not feature strongly in the literature ontechnological and manufacturing-based inno-vation Another area traditionally not givenmuch emphasis in this literature is organiza-tion and culture which fortunately is bettertreated by the organizational behaviour litera-ture where a number of measures have beendeveloped Much of the current state of meas-urement practice can be traced back to the dis-ciplinersquos early manufacturing RampD and NPDfocus While product innovation is undoubt-edly important it is only one dimension of anorganizationrsquos innovation agenda Process andorganizational innovations are recognizedtoo as critical for competitiveness yet theseperspectives are inadequately represented inmeasurement terms
General areas of omission in this fieldrelate to an over-reliance on financial meas-ures rather than process measures for exam-ple the use of financial measures of portfoliooptimization but an absence of portfoliocapability measures a similar reliance oncodified knowledge such as patents to theexclusion of more intangible measures suchas tacit knowledge the measurement of levelsof resources or activities with no indication ofwhat an optimal level would be the measure-ment of drivers of innovation without meas-ures of whether these drivers are aligned witheach other and with firm strategy measures ofpresence that do not measure quality (eg theuse of dichotomous (yesno) measures that do
40 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
not indicate how well an action is implementedand measures of the presence of leadership(such as champions) but not of quality ofleadership) a general absence of measuresfor important properties of organizationalstructures such as flexibility and a lack ofmeasures of the match between structure andenvironment a technological and NPD bias toproject management measures and a relativeabsence of measures for service sectors apaucity of measures for internal communica-tions and a general lack of measures forcommercialization management ndash in particulararound marketing and sales capabilities forinnovative products and services All thesegaps provide the potential for further researchin innovation management measurement
The absence of an accepted framework ofinnovation management measures leads notonly to the gaps identified above but also toother problems in the literature One is that itis frequently unclear whether or not the met-rics used are of the researchersrsquo own devisingdrawn from the literature or are what are usedby the organizations being studied Nor is italways clear when metrics are devised orrecommended whether they are intended foruse in a research capacity or for managementtasks Further the measures proposed in theliterature often seem to be proposed abstractlywith little consideration given to the use ofmeasures as a management tool in the day-to-day context of managing innovation In theabsence of a comprehensive framework forinnovation management measurement organ-izations will inevitably resort to ad hoc andpartial metrics which can encourage wastefulpractice (eg measuring innovation managementcapability according to annual RampD spend)We hope that the framework constructed inthis paper will be useful in the constructionof comprehensive measures of innovationmanagement
Acknowledgements
The research reported here was supported bya grant from Cranfield School of Management
the authors gratefully acknowledge this supportFurther the authors are grateful to the editorsand two anonymous reviewers for their helpfuland insightful comments on previous versionsof this paper
Note
1 Corresponding author Telephone +44 (0) 207594 9137 e-mail radamsimperialacuk
References
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Agrell A and Gustafson R (1994) The teamclimate inventory (TCI) and group innovation apsychometric test on a Swedish sample of workgroups Journal of Occupational and Organiza-tional Psychology 67 143ndash151
Alegre-Vidal J Lapiedra-Alcami R and Chiva-Gomez R (2004) Linking operations strategy andproduct innovation an empirical study of Spanishceramic tile producers Research Policy 33 829ndash839
Amabile TM (1998) How to kill creativity HarvardBusiness Review SeptemberndashOctober 77ndash87
Amabile TM Conti R Coon H Lazenby J andHerron M (1996) Assessing the work environ-ment for creativity Academy of Management Jour-nal 39 1154ndash1184
Ambrosini V and Bowman C (2001) Tacit know-ledge some suggestions for operationalisationJournal of Management Studies 38 811ndash829
Anderson N and West MA (1996) The teamclimate inventory development of the TCI and itsapplications in teambuilding for innovativenessEuropean Journal of Work and Organizational Psy-chology 5 53ndash66
Anderson NR and West MA (1998) Measuringclimate for work group innovation developmentand validation of the team climate inventory Jour-nal of Organizational Behavior 19 235ndash258
Atuahene-Gima K (1995) An exploratory analysisof the input of market orientation on new productperformance a contingency approach Journal ofProduct Innovation Management 12 275ndash293
Avlonitis GJ Papastathopoulou PG and Gounaris SP(2001) An empirically-based typology of productinnovativeness for new financial services success
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March 2006
and failure scenarios Journal of Product Innova-tion Management 18 324ndash342
Balachandra R and Brockhoff K (1995) Are RampDproject termination factors universal Research-Technology Management 38 31ndash36
Balachandra R and Friar J (1997) Factors for suc-cess in RampD projects and new product innovationa contextual framework IEEE Transactions onEngineering Management 44 276ndash287
Baldridge JV and Burnham RA (1975) Organiza-tional innovation ndash individual organizational andenvironmental impacts Administrative ScienceQuarterly 20 165ndash176
Bantel KA and Jackson SE (1989) Top manage-ment and innovations in banking does the compo-sition of the top team make a difference StrategicManagement Journal 10 107ndash124
Barclay I (1992) The new product developmentprocess part 2 Improving the process of new prod-uct development RampD Management 4 307ndash317
Bard JF Balachandra R and Kaufmann PE(1988) An interactive approach to RampD projectselection and termination IEEE Transactions onEngineering Management 35 139ndash146
Barney J (1991) Firm resources and sustained com-petitive advantage Journal of Management 1799ndash120
Becker SW and Whisler TL (1973) The innova-tive organization a selective view of current theoryand research In Wills G Hayhurst R and Midg-ley D (eds) Creating and Marketing New Prod-ucts London Crosby Lockwood Staples
Bess G (1998) A first stage organization life cyclestudy of six emerging nonprofit organizations inLos Angeles Administration in Social Work 2235ndash52
Bessant J (2003) High Involvement InnovationBuilding and Sustaining Competitive AdvantageThrough Continuous Change Chichester JohnWiley
Bessant J and Francis D (1997) Implementing thenew product development process Technovation17 189ndash197
Blackler F (1995) Knowledge knowledge work andorganizations an overview and interpretationOrganization Studies 16 1021ndash1046
Bougrain F and Haudeville B (2002) Innovationcollaboration and SMEs internal research capaci-ties Research Policy 31 735ndash747
Brenner MS (1994) Practical RampD project prioriti-zation Research Technology Management 37 38ndash43
Brown MG and Svenson RA (1988) MeasuringRampD productivity Research-Technology Manage-ment JulyndashAugust 11ndash15
Brown SL and Eisenhardt KM (1997) The art ofcontinuous change linking complexity theory andtime-paced evolution in relentlessly shifting organiza-tions Administrative Science Quarterly 42 1ndash34
Burgelman RA Christensen CM and Wheel-wright SC (2004) Strategic Management of Tech-nology and Innovation 4th edition New YorkMcGraw HillIrwin
Burns TR and Stalker GM (1961) The Manage-ment of Innovation London Tavistock
Calantone RJ and di Benedetto CA (1988) Anintegrative model of the new product developmentprocess an empirical validation Journal of Prod-uct Innovation Management 5 201ndash215
Cebon P and Newton P (1999) Innovation in firmstowards a framework for indicator developmentMelbourne Business School Working Paper 99-9
Chakravorti B (2004) The new rules for bringinginnovations to market Harvard Business Review82 58ndash67
Chen C-J (2004) The effects of knowledgeattribute alliance characteristics and absorptivecapacity on knowledge transfer performance RampDManagement 34 311ndash321
Chesborough HW and Teece DJ (1996) When isvirtual virtuous Organizing for innovation Har-vard Business Review JanuaryndashFebruary 65ndash73
Chiesa V and Masella C (1994) Searching for aneffective measure of RampD performance In Pro-ceedings 2nd International Product DevelopmentManagement Conference Gothenburg Sweden30ndash31 May Brussels European Institute forAdvanced Studies in Management
Chiesa V Coughlan P and Voss A (1996) Devel-opment of a technical innovation audit Journal ofProduct Innovation Management 13 105ndash136
Cohen WM and Levinthal DA (1990) Absorptivecapacity a new perspective on learning and inno-vation Administrative Science Quarterly 35 128ndash152
Cooper RG (1979a) The dimensions of industrialnew product success and failure Journal of Mar-keting 43 93ndash103
Cooper RG (1979b) Identifying industrial newproduct success Project NewProd Industrial Mar-keting Management 8 124ndash135
Cooper RG (1984) The strategyndashperformance linkin product innovation RampD Management 14 247ndash259
42 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Cooper RG (1990) Stage-gate systems a new toolfor managing new products Business Horizons 3344ndash56
Cooper RG and Kleinschmidt EJ (1990) Newproduct success factors a comparison of lsquokillsrsquoversus successes and failures RampD Management20 47ndash64
Cooper RG and Kleinschmidt EJ (1995) Bench-marking the firmrsquos critical success factors in newproduct development Journal of Product Innova-tion Management 12 374ndash391
Cooper RG Edgett SJ and Kleinschmidt EJ(1999) New product portfolio management prac-tices and performance Journal of Product Innova-tion Management 16 333ndash351
Cooper RG Edgett SJ and Kleinschmidt EJ(2001) Portfolio Management for New Products2nd edition Cambridge MA Perseus
Cooper RG Edgett SJ and Kleinschmidt EJ (2004)Benchmarking best NPD practices Research-Technology Management 47 50ndash59
Cordero R (1990) The measurement of innovationperformance in the firm an overview ResearchPolicy 19 185ndash192
Cormican K and OrsquoSullivan D (2004) Auditingbest practice for effective product innovationmanagement Technovation 24 819ndash829
Coughlan P Chiesa V and Voss C (1994) Evalu-ating leadership as an enabler of innovation InProceedings 2nd International Product Develop-ment Management Conference GothenburgSweden 30ndash31 May Brussels European Institutefor Advanced Studies in Management
Covin JG and Slevin DP (1989) Strategic manage-ment of small firms in hostile and benign environ-ments Strategic Management Journal 10 75ndash87
Daft R (1978) A dual-core model of organizationalinnovation Academy of Management Journal 21193ndash210
Damanpour F (1991) Organizational innovation ameta-analysis of effects of determinants and mod-erators Academy of Management Journal 34 555ndash590
Damanpour F (1996) Organizational complexity andinnovation developing and testing multiple contin-gency models Management Science 42 693ndash716
Davis MC (1998) Knowledge management Infor-mation Strategy The Executiversquos Journal 15 11ndash22
De Brentani U (1991) Success factors in developingnew business services European Journal of Mar-keting 25 33ndash60
De Leede J Nijhof AH and Fisscher OA (1999)The myth of self managing teams a reflection onthe allocation of responsibilities between individu-als teams and the organisation Journal of BusinessEthics 21 203ndash215
Deeds DL (2001) The role of RampD intensitytechnical development and absorptive capacity increating entrepreneurial wealth in high technologystart-ups Journal of Engineering and TechnologyManagement 18 29ndash47
Denyer D and Neely A (2004) Introduction to spe-cial issue innovation and productivity performancein the UK International Journal of ManagementReviews 45 131ndash135
Di Benedetto CA (1996) Identifying the key suc-cess factors in new product launch Journal ofProduct Innovation Management 16 530ndash544
Dodgson M and Hinze S (2000) Indicators used tomeasure the innovation process defects and possi-ble remedies Research Evaluation 8 101ndash114
Dougherty D and Cohen M (1995) Product inno-vation in mature firms In Bowman E and KogutB (eds) Redesigning the Firm New York OxfordUniversity Press
Dougherty D and Hardy C (1996) Sustained prod-uct innovation in large mature organizations over-coming innovation-to-organization problemsAcademy of Management Journal 39 1120ndash1153
DTI (1998) An Audience With Innovation Innovationin Management London Department of Trade andIndustry
Dyer B and Song XM (1998) Innovation strategyand sanctioned conflict a new edge in innovationJournal of Product Innovation Management 15505ndash519
Ekvall G (1996) Organizational climate for creativ-ity and innovation European Journal of Work andOrganizational Psychology 5 105ndash123
Ernst H (2002) Success factors of new productdevelopment a review of the empirical literatureInternational Journal of Management Reviews 41ndash40
Farrukh C Phaal R Probert D Gregory M andWright J (2000) Developing a process for therelative valuation of RampD programmes RampDManagement 30 43ndash53
Frenkel A Maital S and Grupp H (2000) Meas-uring dynamic technical change a technometricapproach International Journal of TechnologyManagement 20 429ndash441
Galunic DC and Rodan S (1998) Resource recom-binations and the firm knowledge structures and
copy Blackwell Publishing Ltd 2006 43
March 2006
the potential for Schumpeterian innovationStrategic Management Journal 19 1193ndash1201
Geisler E (1995) An integrated costndashperformancemodel of research-and-development evaluationOmega ndash International Journal of ManagementScience 23 281ndash294
Glaser BG and Strauss AL (1967) The Discoveryof Grounded Theory Strategies for QualitativeResearch London Aldine
Globe S Levy GW and Schwartz CM (1973)Key factors and events in the innovation processResearch Management 16 8ndash15
Goffin K and Pfeiffer R (1999) Innovation Man-agement in UK and German Manufacturing Com-panies London Anglo-German Foundation for theStudy of Industrial Society
Grant RM (1991) The resource-based theory ofcompetitive advantage implications for strategyformulation California Management Review 33114ndash135
Greve HR (2003) A behavioral theory of RampDexpenditures and innovations evidence fromshipbuilding Academy of Management Journal 46685ndash702
Griffin A (1997) PDMA research on new productdevelopment practices updating trends and bench-marking best practices Journal of Product Innova-tion Management 14 429ndash458
Griffin A and Page AL (1993) An interim reporton measuring product development success andfailure Journal of Product Innovation Manage-ment 10 291ndash308
Griliches Z (1990) Patent statistics as economicindicators a survey Journal of Economic Litera-ture 28 1661ndash1707
Hall DL and Nauda A (1990) An interactiveapproach for selecting IRampD projects IEEE Trans-actions on Engineering Management 37 126ndash133
Hauser JR and Zettelmeyer F (1997) Metrics toevaluate RDampE Research-Technology Manage-ment 40 32ndash38
Henriksen AD and Traynor AJ (1999) A practicalRampD project-selection scoring tool IEEE Trans-actions on Engineering Management 46 158ndash170
Hipp C and Grupp H (2005) Innovation in theservice sector the demand for service specific-innovation measurement concepts and typologiesResearch Policy 34 517ndash535
Holbek J (1988) The innovation design dilemmasome notes on its relevance and solutions InGroslashnhaug K and Kaufmann G (eds) Innovation
A Cross-Disciplinary Perspective NorwegianUniversity Press pp 253ndash277
Hope Hailey V (2001) Breaking the mould Innova-tion as a strategy for corporate renewal Inter-national Journal of Human Resource Management12 1126ndash1140
Hull R Coombs R and Peltu M (2000) Know-ledge management practices for innovation anaudit tool for improvement International Journalof Technology Management 20 633ndash656
Hultink EJ Hart S Robben HSJ and Griffin A(2000) Launch decisions and new product successan empirical comparison of consumer and indus-trial products Journal of Product Innovation Man-agement 17 5ndash23
Jassawalla AR and Sashittal HC (1999) Buildingcollaborative cross-functional new product teamsAcademy of Management Executive 13 50ndash63
Jenkins S Forbes S Durrani TS and BanerjeeSK (1997) Managing the product developmentprocess 1 An assessment International Journal ofTechnology Management 13 359ndash378
Kaplan RS and Norton DP (1992) The balancedscorecard ndash measures that drive performance HarvardBusiness Review JanuaryndashFebruary 71ndash79
Keller RT (1986) Predictors of performance ofproject groups in RampD organizations Academy ofManagement Journal 29 715ndash726
Kelm KM Narayanan VK and Pinches GE (1995)Shareholder value creation during research-and-development innovation and commercialization stagesAcademy of Management Journal 38 770ndash786
Kerssens-van Drongelen IC and Bilderbeek J(1999) RampD performance measurement morethan choosing a set of metrics RampD Management29 35ndash46
Kerssens-van Drongelen IC and de Weerd-Nederhof PC (1999) The use of performancemeasurement tools for balancing short- and long-term NPD performance International Journal ofInnovation Management 3 397ndash426
Kessler EH and Chakrabarti AK (1996) Innova-tion speed a conceptual model of context anteced-ents and outcomes Academy of ManagementReview 21 1143ndash1191
Kim B and Oh H (2002) An effective RampD per-formance measurement system survey of KoreanRampD researchers Omega ndash International Journalof Management Science 30 19ndash31
Kim J and Wilemon D (2002) Strategic issues inmanaging innovationrsquos fuzzy front-end EuropeanJournal of Innovation Management 5 27ndash39
44 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Kimberly JR (1981) Managerial innovation InNystrom PC and Starbuck WH (eds) Handbookof Organizational Design Vol 1 New YorkOxford University Press pp 84ndash104
King N (1992) Modelling the innovation process anempirical comparison of approaches Journal ofOccupational and Organizational Psychology 6589ndash100
Kirton MJ (1976) Adaptors and innovators adescription and measure Journal of Applied Psy-chology 61 622ndash629
Kivimaumlki M Kuk G Elovainio M Thomson LKalliomaumlki-Levanto T and Heikkilauml A (1997)The team climate inventory (TCI) ndash four or fivefactors Testing the structure of TCI in samples oflow and high complexity jobs Journal of Occupa-tional and Organizational Psychology 70 375ndash389
Kivimaumlki M Lansisalmi H Elovainio M Heik-kila A Lindstrom K Harisalo R Sipila K andPuolimatka L (2000) Communication as a deter-minant of organizational innovation RampD Man-agement 30 33ndash42
Kleinknecht A (1987) Measuring RampD in smallfirms how much are we missing Journal of Indus-trial Economics 36 253ndash256
Koen P Ajamian G Burkart R Clamen ADavidson J DrsquoAmore R Elkins C Herald KIncorvia M Johnson A Karol R Seibert RSlavejkov A and Wagner K (2001) Providingclarity and a common language to the lsquofuzzy front endrsquoResearch-Technology Management 44 46ndash55
Koput K (1997) A chaotic model of innovativesearch some answers many questions Organiza-tion Science 8 528ndash542
Lawrence PR and Lorsch JW (1967) Organizationand Environment Harvard MA Harvard Univer-sity Press
Lee M Son B and Lee H (1996) Measuring RampDeffectiveness in Korean companies Research-Technology Management 39 28ndash31
Leonard D and Sensiper S (1998) The role of tacitknowledge in group innovation California Man-agement Review 40 112ndash132
Leseure M Birdi K Bauer J Denyer D andNeely A (2004) Adoption of Promising PracticeA Systematic Review of the Literature LondonAdvanced Institute of Management Research
Li HY and Atuahene-Gima K (2001) Productinnovation strategy and the performance of newtechnology ventures in China Academy of Man-agement Journal 44 1123ndash1134
Liao J Welsch H and Stoica M (2003) Organiza-tional absorptive capacity and responsivenessan empirical investigation of growth-orientedSMEs Entrepreneurship Theory and Practice 2863ndash86
Linstone HA and Turoff M (eds) (2002) The Del-phi Method Techniques and Applications httpwwwisnjitedupubsdelphibook
Loch C Stein L and Terwiesch C (1996) Meas-uring development performance in the electronicsindustry Journal of Product Innovation Manage-ment 13 3ndash20
Mathisen GE and Einarsen S (2004) A review ofinstruments assessing creative and innovative envi-ronments within organizations Creativity ResearchJournal 16 119ndash140
Maylor H (2001) Assessing the relationshipbetween practice changes and process improve-ment in new product development Omega ndashInternational Journal of Management Science 2985ndash96
McAdam RMS (1999) The process of knowledgemanagement within organizations a critical assess-ment of both theory and practice Knowledge andProcess Management 6 101ndash113
McManus RJ Wilson S Delaney BC Fitzmau-rice DA Hyde CJ Tobias RS Jowett S andHobbs FDR (1998) Review of the usefulness ofcontacting other experts when conducting a litera-ture search for systematic reviews British MedicalJournal 317 1562ndash1563
Miles RE and Snow CC (1978) Organization StrategyStructure and Process New York McGraw-Hill
Miller D and Friesen PH (1982) Innovation inconservative and entrepreneurial firms two modelsof strategic momentum Strategic ManagementJournal 3 1ndash24
Mintzberg H (1978) Patterns in strategy formationManagement Science 24 934ndash948
Mitroff I (1987) Business Not As Usual Rethinkingour Individual Corporate and Industrial Strategiesfor Global Competition London Jossey-Bass
Moenaert RK De Meyer A Souder WE andDeschoolmeester D (1995) RampDMarketing com-munication during the fuzzy front-end IEEETransactions on Engineering Management 42243ndash257
Neely A and Hii J (1998) Innovation and BusinessPerformance A Literature Review Report producedfor Government Office for the Eastern RegionCambridge The Judge Institute of ManagementStudies University of Cambridge
copy Blackwell Publishing Ltd 2006 45
March 2006
Nelson R and Winter G (1982) An EvolutionaryTheory of Economic Change Cambridge MABelknap Press
Nohria N and Gulati R (1996) Is slack good or badfor innovation Academy of Management Journal39 1245ndash1264
Nonaka I (1991) The knowledge-creating companyHarvard Business Review NovemberndashDecember96ndash104
Nonaka I and Takeuchi H (1995) The KnowledgeCreating Company How Japanese CompaniesCreate the Dynamics of Innovation New YorkOxford University Press
OrsquoBrien JP (2003) The capital structure implica-tions of pursuing a strategy of innovation StrategicManagement Journal 24 415ndash431
OrsquoReilly CA and Tushman ML (1997) Using cul-ture for strategic advantage promoting innovationthrough social control In Tushman ML andAnderson P (eds) Managing Strategic Innovationand Change A Collection of Readings New YorkOxford University Press pp 200ndash216
Oliver N Dewberry E and Dostaler I (1999) Newproduct development performance and practice aninternational benchmarking study in the consumerelectronics industry In Proceedings 6th Inter-national Product Development Management Confer-ence Cambridge UK Brussels European Institutefor Advanced Studies in Management
Pakes A and Griliches Z (1980) Patents and RampDat the firm level a first report Economic Letters 5377ndash381
Parthasarthy R and Hammond J (2002) Productinnovation input and outcome moderating effectsof the innovation process Journal of Engineeringand Technology Management 19 75ndash91
Patterson F (2003) Innovation potential indicatorAvailable at wwwoppcouk
Phelps B (2004) Smart Business Metrics MeasureWhat Really Counts and Manage What Makes theDifference London FT-Prentice Hall
Pinto JK and Prescott JE (1988) Changes in crit-ical success factors over the stages in the projectlife cycle Journal of Management 14 5ndash18
Pitt M and Clarke K (1999) Competing on compe-tence a knowledge perspective on the managementof strategic innovation Technology Analysis andStrategic Management 11 301ndash316
Pittaway L Robertson M Munir K Denyer D andNeely A (2004) Networking and Innovation in theUK a Systematic Review of the Literature LondonAdvanced Institute of Management Research
Porter ME and Ketels CHM (2003) UK Compet-itiveness Moving to the Next Stage DTI Econom-ics Paper No 3 URN 03899
Pugh DS Hickson DJ Hinings CR and TurnerC (1969) The context of organization structuresAdministrative Science Quarterly 14 91ndash114
Ramanujam V and Mensch GO (1985) Improvingthe strategyndashinnovation link Journal of ProductInnovation Management 2 213ndash223
Richard O McMillan A Chadwick K and DwyerS (2003) Employing an innovation strategy inracially diverse workforces ndash effects on firm per-formance Group amp Organization Management 28107ndash126
Rickards T (1991) Innovation and creativity treesand pathways RampD Management 21 97ndash108
Rochford L (1991) Generating and screening newproduct ideas Industrial Marketing Management20 287ndash296
Rothwell R (1992) Successful industrial innovationcritical factors for the 1990s RampD Management22 221ndash239
Rothwell R Freeman C Horseley A JervisVTP Robertson AB and Townsend J (1974)SAPPHO updated ndash Project SAPPHO phase IIResearch Policy 3 258ndash291
Saleh SD and Wang CK (1993) The managementof innovation ndash strategy structure and organiza-tional climate IEEE Transactions on EngineeringManagement 40 14ndash21
Schmidt RL and Freeland JR (1992) Recentprogress in modelling RampD project-selection proc-esses IEEE Transactions on Engineering Manage-ment 39 189ndash201
Schroeder RG Van de Ven AH Scudder GDand Polley D (1989) The development of innova-tion ideas In Van de Ven AH Angle HL andPoole M (eds) Research on the Management ofInnovation The Minnesota Studies New YorkHarper amp Row pp 107ndash133
Scott S and Bruce R (1994) Determinants ofinnovative behaviour a path model of individualinnovation Academy of Management Journal 37580ndash607
Shane S Venkataraman S and MacMillan I (1995)Cultural differences in innovation championingstrategies Journal of Management 21 931ndash952
Shepard HA (1967) Innovation-resisting and inno-vation producing organizations Journal of Busi-ness 40 470ndash477
Shin J and McClomb GE (1998) Top executiveleadership and organizational innovation an
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Innovation management measurement A review
empirical investigation of nonprofit human serviceorganizations (HSOS) Administration in SocialWork 22 1ndash21
Single AW and Spurgeon WM (1996) Creatingand commercializing innovation inside a skunkworks Research-Technology Management 39 38ndash41
Song XM and Parry ME (1996) What separatesJapanese new product winners from losersJournal of Product Innovation Management 13422ndash439
Souitaris V (2002) Firm-specific competenciesdetermining technological innovation a survey inGreece RampD Management 32 61ndash77
Stock GN Greis NP and Fischer WA (2001)Absorptive capacity and new product developmentJournal of High Technology ManagementResearch 12 77ndash91
Sundbo J (1997) Management of innovation inservices Service Industries Journal 17 432ndash455
Sveiby KE (1997) The New Organizational WealthManaging and Measuring Knowledge-BasedAssets San Francisco CA Berrett-Koehler
Szakonyi R (1994) Measuring RampD effectiveness IResearch-Technology Management 37 27ndash32
Thompson L (2003) Improving the creativity oforganizational work groups Academy of Manage-ment Executive 17 96ndash109
Tidd J Bessant J and Pavitt K (1997) ManagingInnovation Integrating Technological Market andOrganizational Change Chichester UK JohnWiley
Tipping J and Zeffren E (1995) Assessing thevalue of your technology ResearchndashTechnologyManagement 38 22ndash40
Trajtenberg M (1990) A penny for your quotes ndashpatent citations and the value of innovations RandJournal of Economics 21 172ndash187
Tranfield D Denyer D and Smart P (2003)Towards a methodology for developing evidence-informed management knowledge by means of asystematic review British Journal of Management14 207ndash222
Tsai W (2001) Knowledge transfer in intraorganiza-tional networks effects of network position andabsorptive capacity on business unit innovation andperformance Academy of Management Journal44 996ndash1004
Van Den Bulte C (2000) New product diffusionacceleration measurement and analysis MarketingScience 19 366ndash380
Verhaeghe A and Kfir R (2002) Managing innovationin a knowledge intensive technology organisation(KITO) RampD Management 32 409ndash417
Verworn B (2002) The fuzzy front end of productdevelopment an exploratory study In Proceedings9th International Product Development ManagementConference Sophia Antipolis France pp 863ndash878Brussels European Institute for Advanced Studiesin Management
Veryzer RW (1998) Discontinuous innovation andthe new product development process Journal ofProduct Innovation Management 15 304ndash321
Volberda HW (1996) Towards the flexible formhow to remain vital in hypercompetitive environ-ments Organizational Science 7 359ndash374
Von Hippel E (1986) Lead users a source of novelproduct concepts Management Science 32 791ndash805
Von Zedtwitz M (2002) Organizational learningthrough post-project reviews in RampD RampD Man-agement 32 255ndash268
Voss C Chase R and Roth A (1999) Internationalservice study Decision Line May 4ndash7
Vyakarnam S and Adams RJ (2001) Institutionalbarriers to enterprise support an empirical studyEnvironment and Planning C Government andPolicy 19 335ndash353
Werner BM and Souder WE (1997) MeasuringRampD performance ndash state of the art Research-Technology Management 40 34ndash42
West MA (1990) The social psychology of innova-tion in groups In West MA and Farr JL (eds)Innovation and Creativity at Work Psychologicaland Organizational Strategies Chichester UKJohn Wiley pp 309ndash333
West MA and Anderson NR (1996) Innovation intop management teams Journal of Applied Psychol-ogy 81 680ndash693
White A (2002) Enabling factors in the front end ofthe innovation process In Proceedings 9thInternational Product Development ManagementConference Sophia Antipolis France BrusselsEuropean Institute for Advanced Studies inManagement pp 879ndash887
Wolfe RA (1994) Organizational innovationreview critique and suggested research direc-tions Journal of Management Studies 31 405ndash431
Yoon E and Lilien GL (1985) A new productlaunch-time decision model Journal of ProductInnovation Management 3 134ndash144
Zahra SA and George G (2002) Absorptivecapacity a review reconceptualization and
copy Blackwell Publishing Ltd 2006 47
March 2006
extension Academy of Management Review 27185
Zaltman G Duncan R and Holbek J (1973) Inno-vations and Organizations New York John Wiley
Zien KA and Buckler SA (1997) From experiencedreams to market crafting a culture of innovationJournal of Product Innovation Management 14274ndash287
Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
22 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
methods there is a risk that different opera-tionalizations of the same effect will produceconflicting findings and that theoreticaladvances become lost in the different termi-nologies that resist the accumulation ofknowledge
Within the literature on the management ofinnovation measures of aspects of innova-tion management are frequently proposedresponding to the needs of both firms andacademics to understand the effectivenessof innovation actions (Barclay 1992 Kim andOh 2002) However their treatment is frag-mented It is possibly a consequence of thisfragmentation that empirical studies havefound many organizations tend to focus onlyon the measurement of innovation inputs andoutputs in terms of spend speed to marketand numbers of new products and ignore theprocesses in-between (Cordero 1990) A gen-eralized measurement framework specifiedat the level of the organization would providea useful basis for managers to monitor andevaluate their innovation processes diagnoselimitations and prescribe remedies (Cebon andNewton 1999) In an attempt to extend meas-urement theory and practice beyond a focuson output performance this paper reviews theliterature as it relates to the measurement ofinnovation management in the context of aconceptual framework of process that pro-vides the basis for a general measurementframework We bring together disparate sug-gestions for innovation management measure-ment made in various parts of the literatureand summarize commonly used measures atdifferent stages of innovation managementWe identify gaps in measurement theory andpractice and point the way toward the devel-opment of a comprehensive set of innovationmanagement measures
Developing an Analytic Framework for Innovation Management Measurement
The innovation literature is a fragmentedcorpus and scholars from a diversity ofdisciplinary backgrounds adopt a variety of
ontological and epistemological positions toinvestigate analyse and report on a phenome-non that is complex and multidimensional(Wolfe 1994) More specifically this diversityis reflected in the multitude of approachesto measurement and the number of differentmeasures that can be found It is difficult toidentify a bounded body of literature in whicha comprehensive discussion of innovationmeasurement issues might be located Repre-senting this diversity within a synthesizedframework is a challenging task
Indeed the term lsquoinnovationrsquo is notoriouslyambiguous and lacks either a single definitionor measure We chose to adopt the UK Depart-ment of Trade and Industryrsquos (DTI 1998)broad definition of innovation lsquothe successfulexploitation of new ideasrsquo to guide ourreview because it accommodates the range ofinnovation types (product service processadministrative technological etc) that onemight reasonably expect to encounter in anorganization This holistic approach is clearlyimportant from the practitionerrsquos perspectiveas it obviates the need to collate measures ona piecemeal basis from a diverse literatureSo while this review is broadly specified itsbreadth presents a number of methodologicalchallenges We address these challenges byemploying the approach of an adapted sys-tematic review
The notion of systematic review hasrecently gained currency in the managementliterature (Denyer and Neely 2004) and thestrategy for this review followed in manyrespects the methodology detailed by Tran-field et al (2003) They state that systematicreviews include development of clear andprecise aims and objectives pre-plannedmethods comprehensive search of all poten-tially relevant articles use of explicit repro-ducible criteria in the selection of articles forreview appraisal of the quality of the researchand the strength of the findings synthesis ofindividual studies using an explicit analyticframework and balanced impartial and com-prehensible presentation of the results Ourreview strategy broadly adopted this model
copy Blackwell Publishing Ltd 2006 23
March 2006
but with some changes to suit the exigenciesof our question and data sources notably firstthe inclusion of a Delphi study and second arelaxation of the requirement for reproduciblecriteria for document selection and appraisal
The authors formed a review panel consist-ing of domain-relevant experts from a rangeof disciplines with an interest in both innova-tion and measurement Time was spent outlin-ing the research project which was articulatedin terms of the fragmented world of com-peting and contradictory measures addressingthe issue of the management of innovationRather than attempting to generate an exhaus-tive list our objectives were defined in termsof the collation and synthesis of measuresbetter reflecting the needs of academics andpractitioners we ask lsquoWhat are the measuresthat have been used and to what extent dothey adequately populate and dimensionalizea comprehensive analytic frameworkrsquo
McManus et al (1998) reflecting upon sys-tematic review identified the limitations ofsearching electronic databases as sometimesuncovering only half the relevant studies Theyattribute this in part to a lack of sensitivity ofelectronic databases Indeed this may accountfor the disappointing outcome in terms ofbreadth that Leseure et al (2004) report fromtheir search of electronic databases for litera-ture relating to the adoption of promisingpractices Compensating strategies includeeither hand searching of journals (which wehad to discount on the grounds of time andcost) or consultation with appropriate experts(McManus et al 1998) The latter are partic-ularly important when lsquoperforming a system-atic review in a developing field that does nothave a clearly defined specialist literaturersquo(McManus et al 1998 1563) Using the Del-phi method a process consisting of structureddesign for group communication relating tocomplex problems (Linstone and Turoff 2002)we extended our consultation process toincorporate the input of external experts
A list of global experts in innovation andmeasurement (n = 100) based on the knowledgeof the review panel was developed Potential
respondents were contacted by e-mail and askedto respond to a series of questions relating toinnovation metrics at the level of manage-ment practice particularly addressing aspectsof measuring the existence and effectivenessof the innovation management processThere was a high degree of consensus in the28 responses received All respondents recog-nized the existence of a plethora of extantmeasures obviating the need for new meas-ures to be developed Specifically an absenceof measures well aligned to the activities ofthe innovation process was noted Furtherour attention was drawn to the absence ofdevices to help identify the appropriatemetrics to apply
Systematic review stresses the importanceof an audit trail in the review process toensure clarity and replicability Significant tothis is the use of explicit reproducible criteriain the selection of articles for review and anappraisal of the quality of the research and thestrength of the findings (Tranfield et al 2003)However regardless of a studyrsquos methodologyor generalizability it might still incorporatemeasures of innovation management that couldcontribute to the construction of a measure-ment framework and so grey literature isincluded in this review As we were notreviewing an evidence base in the normallyaccepted use of the term quality criteria asused in previously published systematic reviewsin the management literature (eg Leseureet al 2004 Pittaway et al 2004) in which thevalue of the evidence base is determined byassessed levels of theory robustness method-ology implications for practice generalizabilityand contribution were felt not to be whollyrelevant in this case We instead adopted aposition akin to Glaser and Straussrsquos (1967)notion of lsquotheoretical saturationrsquo which isachieved when
no additional data are being found whereby theresearcher can develop properties of the categoryAs he sees similar instances over and over againthe researcher becomes empirically confident thata category is saturated hellip when one category is
24 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
saturated nothing remains but to go on to newgroups for data on other categories and attempt tosaturate these categories also (Glaser and Strauss1967 65)
That is the incremental contribution of furthersampling is marginal and fails to add significantvalue The steps of our review are presented inTable 1
A plethora of studies operationalize meas-ures of aspects of innovation managementhowever to provide some synthesis and iden-tify gaps agreement regarding the nature ofinnovation management is needed The litera-ture lacks such consensus The concept is fre-quently disaggregated into component partsand scholars adopt their own partial views Asa result the operationalization of measures isfrequently idiosyncratic owing more to thepredilections of the researcher and the exigen-cies of the data than to the overarching objec-tives of synthesis or cumulation To organizecompare and contrast such measures we pro-pose a typology of elements of the innovationmanagement process
Many scholars have sought to identify thekey activities of the innovation managementprocess (Wolfe 1994) some of which are pre-sented as linear models (eg Daft 1978) andothers that are dynamic and recursive charac-terized by feedback and feed-forward loops(eg Schroeder et al 1989) While usefulthese models are limited from a measurementperspective first there are many competingmodels with consensus only evident at abstractlevels second models have principally been
generated in the context of technology and sogeneralizability is constrained third with afocus on activities models fail to take accountof the organizational pervasiveness of innova-tion and its socio-technical connectedness withall aspects of the organization or the levelsof integration envisaged in Rothwellrsquos (1992)fifth-generation process model Finally whilethe range and sequence of activities may varyacross organizations and projects their success-ful management is affected by a number offactors Cebon and Newton (1999) call thisthe lsquocapacity to make changersquo about whichthe literature generally is relatively silent(Neely and Hii 1998) Based on a review ofmodels we propose a seven-factor frameworkof meaningful categories specified in terms ofthe requisite organizational capabilities tomake and manage change (see Table 2)
In a review of the factors associated withnew product development (NPD) success Ernst(2002) echoes Cooper and Kleinschmidtrsquos(1995) influential five techno-centric factorsfor new product performance NPD processNPD strategy organization culture and manage-ment commitment This model though over-looks innovation in non-technical contextsand other important factors such as the role ofknowledge (Leonard and Sensniper 1998)
In their technical innovation audit toolChiesa et al (1996) describe process andperformance as the two foci of innovationmanagement measures They overlay lsquocoreprocessesrsquo with a set of lsquoenabling processesrsquothe latter describing the deployment ofresources and the effective use of appropriatesystems and tools governed by top manage-ment leadership and direction Finding thisapplicable only to lsquohardrsquo innovations Ver-haeghe and Kfir (2002) extended the audittool to an investigation of the processes thatsupport and enable both lsquohardrsquo and lsquosoftrsquo (ega research or consultancy project) innovationThe changes they made may appear semanticfor instance relabelling lsquoprocess innovationrsquo aslsquotechnology transferrsquo However the importantimplication is that the study extends the appli-cation of the instrument to service contexts
Table 1 Review strategy
Step 1 Establish review team and scope and nature of the question and search strings
Step 2 Undertake Delphi investigationStep 3 Preliminary search of electronic databasesStep 4 Develop analytic frameworkStep 5 Secondary search of electronic databases and
Delphi studyStep 6 Content analysis of data set sorting of
measures into first order categories defined by the analytic framework
Step 7 Review measures against framework for gaps
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ell Publishing Ltd 200625
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Table 2 Innovation management models and organizing framework
Cooper and Kleinschmidt (1995)
Chiesa et al (1996)
Cormican and OrsquoSullivan (2004)
Goffin and Pfeiffer (1999) Burgelman et al (2004)
Verhaeghe and Kfir (2002)
Inputs Creativity and human resources
Resource availability Idea generation Technology acquisition
Knowledge management
Resource provision
Understand relevant technological developments and competitor strategies
Networking
Strategy NPD strategy Strategy and leadership
Innovation strategy
Strategic management
Organization and culture
Organizational culture Managementcommitment
Leadership Culture and climate
Structural and cultural context of the organization
Portfolio management
NPD process Systems and tools
Planning and selection
Portfolio management
Project management Communication and collaboration
Project management
Development
Commercialization Structure and performance
Commercialization
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Innovation management measurement A review
Furthermore they explicitly bounded theirmodel with notions of inputs and commercial-ized outputs
Cormican and OrsquoSullivan (2004 820) reflect-ing earlier studiesrsquo coverage of the organizationof innovation conceive of product innovationas a continuous and cross-functional processlsquoinvolving and integrating a growing numberof different competencies [inside the organiza-tion]rsquo So effective management of the processrequires successful adoption and adaption of asocio-technical systems approach to all aspectsof the organization critically including peopleand process as well as technology-relatedissues
While there are areas of commonalityacross these innovation management modelsno one model covers every dimension Thissuggests a need for a synthetic and integrativeframework to promote comparability and toenable future work to build on results found inprevious studies In column 1 of Table 2 wepresent such a framework derived from asynthesis of the studies presented in the othercolumns of the table The framework consistsof seven categories inputs knowledge manage-ment strategy organization and culture port-folio management project management andcommercialization
In the following sections we use these seveninductively derived categories as the organiz-ing framework for a discussion of innovationmanagement measurement For each of thesecategories we review the diverse literaturerelevant to the measurement of that typologicalcategory Within each category a series of sub-dimensions of measurement focus are identi-fied reflecting the distinctions and emphasesin the literature (see Table 3)
Measures of Innovation Management
Inputs Management
Inputs management is concerned with theresourcing of innovation activities and includesfactors ranging from finance to human andphysical resources to generating new ideas
The construct research and development (RampD)intensity has frequently been used as a globalmeasure of input Typically it is expressed asa ratio between expenditure (eg Parthasarthyand Hammond 2002) or numbers employedin RampD roles (Kivimaumlki et al 2000) and someexpression of output The relationship betweenRampD intensity and firm or innovation per-formance has been empirically demonstratedin several studies (eg Deeds 2001 Greve2003 Parthasarthy and Hammond 2002)However there is some equivocality in the lit-erature Stock et al (2001) note an inverted-Urelationship between RampD intensity and NPDperformance and Bougrain and Haudeville(2002) point out that it does not influence thefuture prospects of a project and is indeed animperfect measure of innovation activityFurther RampD is only one of several inputs intothe innovation process and therefore cannotbe regarded as an adequate proxy it also doesnot appear to be a very useful measure forsmall and medium-sized enterprises (SMEs)which may not have formal RampD activities ormay not record them (Kleinknecht 1987) orindeed for service industries which tend to havelow RampD intensity (Hipp and Grupp 2005)
Table 3 Innovation management measurement areas
Framework category Measurement areas
Inputs People Physical and financial resources Tools
Knowledge management
Idea generation Knowledge repository Information flows
Innovation strategy Strategic orientation Strategic leadership
Organization and culture
Culture Structure
Portfolio management
Riskreturn balance Optimization tool use
Project management Project efficiency Tools Communications Collaboration
Commercialization Market research Market testing Marketing and sales
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March 2006
High levels of RampD intensity are thereforenot necessarily evidence of good innovationpractice they may simply mask process inef-ficiencies (Cebon and Newton 1999 Dodgsonand Hinze 2000) However adequate fundingis clearly a critical input into the innovationprocess Expenditure data have long been apopular proxy measure of innovation inputlargely because of their ready availabilitySeveral different approaches both qualitativeand quantitative to measuring funding canbe identified total expenditure expenditureexpressed as a proportion of sales or revenuesand expenditure by item (organizational depart-ment patent innovation or scientist) (Geisler1995 Oliver et al 1999) Also there is aseries of perceptual measures that attempt todetermine the adequacy of funding (Atuahene-Gima 1995) Measures though tend princi-pally to be quantitative and express little otherthan funding level in particular few measuresattempt to determine the adequacy of fundingfor the innovation project Kerssens-vanDrongelen and de Weerd-Nederhof (1999)point to a lack of measurement proceduresto help managers diagnose poor innovationperformance or support improvement
A more helpful measure of inputs maytherefore be obtained by disaggregating inputsinto different types and measuring each inde-pendently before aggregating back to a meas-ure of overall inputs management Brown andSvenson (1988 30) define the inputs into theRampD system as lsquothe raw materials or stimulia system receives and processesrsquo includingpeople equipment facilities and funds Thisfundamental distinction between people toolsand physical and financial resources is widelymirrored in the literature
People factors have been measured as thenumber of people committed to the innovationtask (absolute numbers and relative to totalemployees) in terms of the mix of types ofpeople regarding cosmopolitanism and pro-pensity to innovate and in terms of skillsexperience and education Damanpour (1991)argues that a diversity of skills and experiencepermits more differentiated units from which
collaborative relationships can emerge and addsignificant value to innovation outcomesAlthough Baldridge and Burnham (1975) arguethat demographic characteristics (sex agecosmopolitanism education) do not appearto influence innovative behaviour amongindividuals more recent research suggests thatinnovating groups should comprise individualswith a mix of these characteristics (Amabile1998) Members with high levels of educationand self-esteem increase the effectiveness ofRampD project teams (Kessler and Chakrabarti1996) and individuals of greater educationalattainment with diverse backgrounds havebeen associated with more innovative teams(Bantel and Jackson 1989)
The propensity of an individual to innovatehas received considerable attention though itis difficult to measure Kirton (1976) devel-oped a 32-item questionnaire designed toestablish an individualrsquos position on anlsquoadaptorndashinnovatorrsquo continuum Scott andBruce (1994) operationalized an lsquoinnovativebehaviour measurersquo consisting of six itemsagainst which subordinates are measured byhierarchical superiors Finally the InnovationPotential Indicator (Patterson 2003) providesa framework for investigating individualbehaviours that might promote or inhibitinnovation in the workplace This measureis constructed around four dimensions anindividualrsquos motivation to change challeng-ing behaviour preferred approach to workand preference for tried and trustedmethods of work as opposed to doing thingsdifferently
Facilities or physical resources is a broadcategory that captures a range of inputs frombuildings to computer equipment Physicalresources can be counted or measured indollar terms However one important generalmeasure of facilities which cannot be so read-ily measured is slack Slack resources orunused capacity can be regarded as an import-ant catalyst for innovation Slack allowsfailures to be absorbed provides the opportu-nity for diversification and fosters a cultureof experimentation and protects against the
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Innovation management measurement A review
uncertainty of project failure (Kimberly 1981)An alternative view however suggests a nega-tive relationship slack can become synonymouswith waste and represents a cost that should beeliminated (Nohria and Gulati 1996) Typicallyfinancial measures of slack are used (Daman-pour 1991) although Miller and Friesen (1982)use both financial and human measures ofslack
Use of systems and tools is an importantinput to the innovation process (Bessant andFrancis 1997 Cooper et al 2004) Measuresidentified tend to relate to whether or not theorganization has or makes use of formal sys-tems and tools in support of innovation Thesecan be of various sorts such as the availabilityand use of tools and techniques for promotingcreativity (Amabile 1998 Rickards 1991Rochford 1991 Thompson 2003) or the avail-ability and use of systems of quality controlranging from informal methods to specifictechniques such as total quality management(TQM) (Souitaris 2002) While tool use canbe evaluated on a binary or degree of use scalethere is little other than Chiesa et alrsquos (1996)technical innovation audit that attempts tomeasure whether or not tool use is consistentwith a firmrsquos innovation requirements and isintegrated into its processes
We conclude that while there has been aconcentration on financial measurement ofinputs there is less emphasis on measuringother aspects of the category Even withinfinancial measures there are few that attemptto determine the adequacy of funding for theinnovation project Further most measuresreflect a preoccupation with RampD and NPDrather than other forms of innovation (egprocess business model) In particular thesofter inputs of skills and knowledge arepoorly represented by measurement instru-ments Tacit knowledge input appears not tobe well captured by extant measures and nomeasures of appropriate skill levels have beendeveloped This is an imbalance that needsto be addressed by further work to developa balanced set of measures covering allsub-dimensions of the input category
Knowledge Management
Knowledge absorption an organizationrsquosability to identify acquire and utilize externalknowledge can be critical to a firmrsquos success-ful operation (Zahra and George 2002) Theconcept of knowledge has received muchattention in recent years (eg Blackler 1995McAdam 1999 Nonaka 1991) and has beenasserted to play a critical role in the innova-tion process (Hull et al 2000) Knowledgemanagement is concerned with obtainingand communicating ideas and informationthat underlie innovation competencies andincludes idea generation absorptive capacityand networking Knowledge managementcovers the management of explicit andimplicit knowledge held by the organization(Davis 1998 Nonaka 1991) as well as theprocesses of gathering and using informa-tion The three areas within knowledgemanagement of importance for innovationmanagement identified in the literatureare idea generation knowledge repository(including the management of implicitand explicit knowledge) and informationflows (including information gathering andnetworking)
The importance of generating sufficientnumbers of ideas has been well established inthe literature Ideas are the raw materials forinnovation it is relatively inexpensive togenerate and screen ideas yet this can havesignificant impact on ultimate success orfailure (Cooper 1988) Several authors haveconceptualized the early stages of the innova-tion process as a somewhat fuzzy period(Kim and Wilemon 2002 Moenaert et al1995 Verworn 2002) including opportunityidentification opportunity analysis idea gen-esis idea selection and concept development(Koen et al 2001)
At the commencement of the innovationprocess when ideas are generated andexplored measures tend mostly to be quanti-tative inexpensive and rapid As the processprogresses and uncertainties with regard toappropriateness feasibility and business case
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March 2006
are reduced measurement approaches becomeincreasingly qualitative and possibly morecostly and time-consuming to deploy Meas-ures imply an assumption that the objective isto generate as many ideas as possible throughthe use of generative tools Several measuresattempt to count the number of ideas gener-ated in a period (cf Chiesa et al 1996 Leeet al 1996) while others probe the extent towhich organizations are using different gener-ative tools and techniques (cf Cebon andNewton 1999 Chiesa et al 1996 Loch et al1996 Rochford 1991 Szakonyi 1994Thompson 2003)
If knowledge is fundamental to innovationthen it should be possible to measure theaccumulated knowledge of the firm itsknowledge repository One aspect of innova-tion relates to combinations of new andexisting knowledge which privileges the con-tribution of internal and external knowledgeand the mechanisms by which it flows intoand within an organization (Galunic andRodan 1998 Nonaka and Takeuchi 1995 Pittand Clarke 1999) Central to this perspectiveis the idea of lsquoabsorptive capacityrsquo the firmrsquosability to absorb and put to use new knowledgeand involving lsquoan ability to recognize thevalue of new external knowledge assimilateit and apply it to commercial endsrsquo (Cohenand Levinthal 1990 128) Absorptive capacityresults from a prolonged process of invest-ment and knowledge accumulation within thefirm and its development is path dependentFirms with strong absorptive capabilities aremore likely to acquire knowledge and learneffectively from outside Higher levels ofabsorptive capacity appear to be positivelyrelated to innovation and performance (Chen2004 Tsai 2001) but it is impossible topredict what is the lsquorightrsquo level of investmentin absorptive capacity for any individualfirm (Cohen and Levinthal 1990) meaningthat it is not readily amenable to interna-tional benchmarking However the conceptualdevelopment and empirical studies infer orimply a range of organizational knowledgestates
Several quantitative approaches have beendeveloped for the measurement of importedtangible knowledge The most frequently usedapproach counts numbers or value of patentsbrought in However this restricts its applica-tion to contexts in which patents are signifi-cant and overlooks those industries wherethey do not feature For a while patent datawas widely accepted as a proxy measure forinnovation More recently however the valid-ity of patent statistics has been questionedpatents vary in their utility for organizationsand so their input value to the innovation can-not adequately be judged in terms of a cashprice (Griliches 1990 Pakes and Griliches1980) Only a few studies have attempted todevise measures for other contexts For exam-ple Kleinknecht (1987) constructed a ques-tion designed to capture the informal hours ofRampD work that are hypothesized to be hiddenwithin other activities or to take place outsideformal working hours
Patents represent codified knowledge butthe importance of tacit knowledge to organi-zational innovation is underscored in theresource-based approach (Barney 1991 Galu-nic and Rodan 1998 Grant 1991 Leonardand Sensiper 1998) Tacit knowledge is animportant resource when it is has value for theorganization is difficult for competitors toimitate is rare and can be operationalized bythe organization Of particular importance isits acquisition and use (Bess 1998) It can beacquired opportunistically or by a deliberatepolicy of search
Tacit knowledge is notoriously difficult tomeasure in organizational research andmethodologies for its investigation andmeasurement can be complex Ambrosiniand Bowman (2001) for example proposean approach that consists of causal mappingfacilitated by story-telling and the use of meta-phor Other attempts to capture tacit know-ledge and group memory have been reportedby Oliver et al (1999) At the level of theorganization Sveiby (1997) suggests thedifference between market value and netbook value as an indicator of the value to an
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Innovation management measurement A review
organization of intangible knowledge assetsThe first method is resource intensive whilein the second it is not clear how much of theidentified value can be attributed to inputs intoinnovation Tacit knowledge input appears notto be well captured by extant measures
Information flows into and within the firmare important in sparking ideas and in allow-ing the development of innovative conceptsThree measurement approaches to informa-tion flows can be identified first measures ofthe linkages that the innovating group main-tains with external organizations and sourcessecond measures of internal informationgathering processes Third measures of cus-tomer information contacts
Linkage measures determine whether or notthe organization has and maintains externallinkages with other organizations or sourcesof information eg through participation inresearch projects university links or attend-ance at trade shows (Atuahene-Gima 1995Tipping and Zeffren 1995) These are princi-pally dichotomous measures only infre-quently is there a measure that implies somesort of qualitative assessment of the nature ofthe linkages Cebon and Newtonrsquos (1999)measures suggest that quality and diversity oflinkage might be an important factor forexample visits to exemplary projects
Statistics on the use of formal methods ofinformation gathering such as project reviewsand the use of technical reports (Oliver et al1999) provide a frequently used approach tothe measurement of information gatheringCebon and Newton (1999) suggest bench-marking information gathering against com-petitorsrsquo activities to gauge how well theactivity is performed Another important areaabout which a firm needs understanding andinformation is customers Atuahene-Gima(1995) lists a series of measures specificallyaimed at examining the extent to which organ-izations make use of customers as a source ofinformation and include measures assessingthe adequacy of information and customercontact time (Lee et al 1996 Miller andFriesen 1982)
Innovation Strategy
Ramanujam and Mensch (1985) defineinnovation strategy as a timed sequence ofinternally consistent and conditional resourceallocation decisions that are designed to fulfilan organizationrsquos objectives Activities mustbe consistent with an overarching organiza-tional strategy that implies that managementmust take conscious decisions regardinginnovation goals (Sundbo 1997) Innovationstrategy is generally understood to describe anorganizationrsquos innovation posture with regardto its competitive environment in terms of itsnew product and market development plans(Dyer and Song 1998) This techno-centricview predominates in the literature andoverlooks those innovative initiatives that areinternally focused (for example the adoptionof new management techniques and prac-tices) In the conceptualization of innovationstrategy as an articulation of the organizationrsquoscommitment to the development of productsthat are new to itself andor to its marketsand because strategy does not operate in avacuum but requires a structural context twocomplementary approaches to its measure-ment which have been described as objectiveand subjective (Li and Atuahene-Gima 2001)can be identified
In the literature scholars principally haveadapted measures from strategic managementresearch to explore the existence nature andextent of innovation strategy Richard et al(2003) use three scale items drawn from thestrategic posture scale devised by Covin andSlevin (1989) who in turn draw on Milesand Snowrsquos (1978) lsquoprospectorsrsquo and Mintz-bergrsquos (1978) lsquoentrepreneurialrsquo organizationsfor their assessment of bank innovativenessThese studies classify organizations based ontheir approach to innovation using classifica-tions that are ontologically grounded in theassumption that innovation orientation can bedeciphered from quantitative interpretationsof new product and market activity
Other objective evidence of an organizationrsquosinnovation strategic posture may include many
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of the input measures (such as level of RampDexpenditure) that we have already discussedIt is argued that it is not their absolute magni-tude but their magnitude relative to industryrivals that is significant As has been notedalthough these may be useful indicators ofcommitment or intent they could mask pro-cess inefficiencies However OrsquoBrienrsquos (2003)observation that an interaction betweenintended strategy and slack will influence per-formance suggests that process inefficienciesare less likely to occur where an innovationstrategy is not merely nominally adopted butis embedded in the culture behaviours andactions of the organization
In Li and Atuahene-Gimarsquos (2001) termsthe evidence for an embedded innovationstrategy is subjective and may include evalua-tions of an organizationrsquos emphasis on NPDsuch as resource allocation Saleh and Wang(1993) describe this as consisting of threemain components risk-taking proactivenessand persistent commitment to innovationThese include top management responsibilityfor innovation within the organization includ-ing specifying and communicating a directionfor innovation Cooper (1984) demonstratedthat new product performance is largelydecided by the strategy that top managementadopts The key components are the linkbetween innovation strategy and overall busi-ness goals (strategic orientation) and theprovision of leadership to make innovationhappen via a strong vision (Pinto and Prescott1988) for innovation a long-term commit-ment to innovation and a clear allocation ofresources (Cooper et al 2004) This distinc-tion between strategic planning or orientationand strategic vision or leadership is frequentlyreplicated in the literature
Two distinct types of strategic orientationmeasures can be identified in the literatureFirst those that measure whether the organi-zation has an innovation strategy this can beevaluated in several ways such as commit-ment to differentiated funding (White 2002)explicit expression (does the organizationhave an innovation strategy) (Miller and
Friesen 1982) and identifiable roles for newproducts and services (Cooper and Klein-schmidt 1990 Geisler 1995 Hauser andZettelmeyer 1997 Tipping and Zeffren 1995)The second type of measure regards strategyas a dynamic instrument that shapes andguides innovation in the organization Thesemeasures assume that strategy exists and asksquestions about how effective it is in shapingand guiding lsquoare structures and systemsalignedrsquo (Bessant 2003) lsquodo innovation goalsmatch strategic objectivesrsquo (Tipping andZeffren 1995) and further similar measures ofstrategic fit (Bessant 2003)
From a strategic leadership perspectiveDougherty and Cohen (1995) found thebehaviour of senior managers to be influentialThose chief executives most likely to makeinnovation happen are those with a clearvision of the future operation and direction oforganizational change and creativity (Shin andMcClomb 1998) Senior management areresponsible for developing and communicat-ing a vision for innovation being supportiveand adopting an attitude tolerant to changeand championing the notion of innovationwithin the organization Managerial toleranceto change creates the right climate for theimplementation stage of innovation whereconflict resolution might be necessary(Damanpour 1991)
Managerial attitude is also reflected innorms or support for innovation These are theexpectation approval and practical support ofattempts to introduce new and improved waysof doing things in the work environmentMeasures are mostly qualitative in nature andexplore perceptions mostly about the extentto which respondents recognize factors to bepresent (or absent)
Relatively few measures of championingand leadership have been uncovered in thisreview other than those that simply ask thequestion whether or not one or other existsperhaps through evidence of signs of commit-ment in annual reports (Chiesa et al 1996) orlevels of concern of top management (Coughlanet al 1994) or whether or not an individual
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Innovation management measurement A review
has been physically assigned to a particularrole (Souitaris 2002) Shane et al (1995) pro-vide a series of reflective questions designedto allow organizations to determine for them-selves their expectations and understandingof the role of champion For example lsquoto whatextent should the organization make it possiblefor the people working on an innovation tobend the rules of the organization to developthe innovation or be allowed to bypass certainpersonnel procedures to get people committedto an innovationrsquo
It must be emphasized that the dominantperspective on strategy in the literature isone that examines the relationship betweenstrategy and performance However a smallnumber of studies have examined the natureof the transitions of these states as organiza-tions adopt and embed an innovation strategyThis sub-section of the literature is under-pinned by the assumption that firms that fol-low innovation strategies differ from otherfirms in several respects It is apparent thatmore innovative firms adopt different opera-tional strategies to accommodate flexibilityand quality capabilities (Alegre-Vidal et al2004) have different capital managementpractices to facilitate slack resources (OrsquoBrien2003) are more tolerant of internal conflict insupport of creativity (Dyer and Song 1998)and maintain organizational structures that arein the lsquointermediate zone between order anddisorderrsquo (Brown and Eisenhardt 1997 22)What is clear from this literature is that anytransition towards an innovation strategy willnecessarily take several years because of theresources and energy that are necessary beforesuch a transformation can even be triggered(Hope Hailey 2001)
Organizational Culture and Structure
Burns and Stalker (1961) described a contin-gency approach to innovation managementlater developed to include concepts of func-tional differentiation specialization and inte-gration (Lawrence and Lorsch 1967) whichsuggests that environmental change prompts a
realignment of the fit between strategy andstructure That is to perform effectively anorganization must be appropriately differenti-ated specialized and integrated Pugh et al(1969) argued that the structure of an organi-zation is strongly related to the context withinwhich it functions Our closing discussion inthe previous section that the characteristics oforganizations following an innovation-focusedstrategy will differ from those that do not isconsistent with this contingency approach andin the following we focus on those dimen-sions of culture and structure that have beenidentified to differentiate between innovativeand non-innovative organizations
Organizational culture and structure concernthe way staff are grouped and the organiza-tional culture within which they work Therehas been considerable work on the situationaland psychological factors supportive of inno-vation in organizations Indeed it has beenwidely demonstrated that the perceived workenvironment (comprising both structural andcultural elements) does make a difference tothe level of innovation in organizations (Ama-bile et al 1996 Ekvall 1996) Creative andinnovative behaviours appear to be promotedby work environment factors (Mathisen andEinarsen 2004) Indeed it is clear that organ-izations can create environments in whichinnovation can be encouraged or hampered(Dougherty and Cohen 1995 Tidd et al1997) A common theme is that of the poly-chronic organization ndash one with the capacityto be in two states at once (Becker andWhisler 1973) Shepard (1967) describes thisas a two-state organization manoeuvreingbetween loose and tight and Mitroff (1987)as business-as-usual versus business-not-as-usual More prosaically this means organiza-tions need to be able for example to providesufficient freedom to allow for the explorationof creative possibilities but sufficient controlto manage innovation in an effective and effi-cient fashion
Ernst (2002) specifies a range of genericcharacteristics for the dedicated project groupassigned the innovation task multidisciplinarity
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dedicated project leader inter-functional com-munication and co-operation qualificationsand know-how of the project leader teamautonomy and responsibility for the processAnd these factors are echoed throughout theliterature Rothwell (1992) refers to them aslsquocorporate conditionsrsquo Chiesa et al (1996)lsquoenabling processesrsquo and OrsquoReilly and Tushman(1997) lsquonorms for innovation and changersquoHowever despite their perceived importancethere is little guidance on how to measurethem
Volberda (1996) developed a conceptualmodel of alternative flexible organizationalforms that are argued to initiate or respondbetter to different types of competition Yet inspite of its importance there is relatively littleevidence of extant measures of flexibility inthe literature Rothwell (1992) and Ekvall(1996) propose a range of foci for measures oforganizational and production flexibility suchas lsquocorporate flexibility and responsiveness tochangersquo Coughlan (1994) considers the flexi-bility of resource allocation Several measuresof personnel flexibility are evident such aslsquothe adaptiveness of RampD personnel to tech-nology changesrsquo (Lee et al 1996) and lsquothewillingness to try new procedures and toexperiment with change so as to improve asituation or a processrsquo (Abbey and Dickson1983) At the level of the firm Liao et al(2003) introduce a similar construct ndash lsquoorgan-izational responsivenessrsquo
Organizational complexity the amount ofspecialization and task differentiation report-edly have a positive relationship (Damanpour1996) though Wolfe (1994) argues that it mayfavour initiation at the expense of implemen-tation Administrative intensity that is theratio of managers to total employees favoursadministrative innovation (Damanpour 19911996) but possibly at the cost of other pro-duct or technological innovations (Doughertyand Hardy 1996) Centralization the concen-tration of decision-making authority at the topof the organizational hierarchy and formaliza-tion the degree of emphasis on following rulesand procedures in role performance have both
been shown to have a negative impact on organ-izational innovation (Burns and Stalker 1961Damanpour 1991) Indeed rigidity in rulesand procedures may prohibit organizationaldecision-makers from seeking new sources ofinformation (Vyakarnam and Adams 2001)
Underlying the concept of the workplaceenvironment are issues related to the manage-ment of human resources and the creation ofa culture or climate in which individuals per-ceive innovation to be a desired and supportedorganizational objective There has been con-siderable empirical work on organizationalclimates supportive of the innovation processand several measurement instruments havebeen developed which Mathisen and Einarsen(2004) review The Team Climate Inventory(TCI) (Anderson and West 1996 1998) andthe KEYS instrument for assessing the workenvironment for creativity (Amabile et al 1996)have been found to be robust and rigorous
The TCI has been applied and validated inseveral studies (Agrell and Gustafson 1994Anderson and West 1998 Kivimaumlki et al1997 West and Anderson 1996) Replicationstudies using the TCI have found it canexplain a large part of the variance in teamsrsquoinnovative performance (Agrell and Gustafson1994) The TCI is based around four mainfactors participative safety (how participativeis the team in decision-making proceduresand how psychologically secure do teammembers feel about proposing new andimproved ways of doing things) support forinnovation (the degree of practical support forinnovation attempts contrasted with the rheto-ric of professed support by senior manage-ment) vision (how clearly defined sharedattainable and valued are the teamrsquos objectivesand vision) and task orientation (the com-mitment of the team to achieve the highestpossible standards of task performance includ-ing the use of constructive progress monitor-ing procedures) (Anderson and West 1996)Kivimaumlki et al (1997) suggested a fifth factorlsquointeraction frequencyrsquo relating to the regularityof contact and communication within theproject team
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There is general agreement about theimportance of individual and group autonomyin the innovation process (Amabile 1998)Zien and Buckler (1997) emphasize the needfor freedom to experiment and the creation ofsafe havens without which innovation out-come might be constrained Measures ofautonomy mix both qualitative and quantita-tive approaches For example lsquothe degree offreedom personnel have in day-to-day operat-ing decisions such as when to work andhow to solve job problems including freedomfrom constant evaluation and close supervi-sionrsquo (Abbey and Dickson 1983) or lsquopercent-age of RampD portfolio with explicit businessunit andor corporate business managementsign-offrsquo (Tipping and Zeffren 1995) Addition-ally several authors have proposed generalmeasures of autonomy such as lsquofreedom tomake operating decisionsrsquo (Abbey and Dick-son 1983) or lsquodegree of empowermentrsquo (deLeede et al 1999 Tipping and Zeffren1995)
Morale and motivation are dimensions ofthe innovative organization that can be meas-ured as they pertain to individuals ndash lsquotheextent to which personnel are well rewardedrsquo(Abbey and Dickson 1983) to groups ndash lsquoourreward system is more group-based thanindividual-basedrsquo (Parthasarthy and Hammond2002) and to the organization as a whole ndashlsquothe degree to which the organization attemptsto excelrsquo (Abbey and Dickson 1983) Aspectsof morale and motivation that have beenmeasured include trust (Miller and Friesen1982) and job satisfaction which has beenmeasured by Keller (1986) on a 20-item scale
Organizational culture may include a sharedvision and it has been argued that the clearerthe vision the more effective it is as a facilitatorof innovation as it enables focused develop-ment of new ideas that can be assessed moreprecisely (West 1990) Pinto and Prescott(1988) found that the only factor to have pre-dictive power in terms of potential for successat all stages of the innovation process (con-ception planning execution and termination)was having a clearly stated missionvision
while West (1990) contends that the quality ofinnovation is partly a function of visionKeller (1986) adopts Kirtonrsquos (1976) 32-itemadopterndashinnovator inventory to determineindividual and team orientation to innovationVision is operationalized in the team climateinventory (cf Agrell and Gustafson 1994Anderson and West 1996 1998 West andAnderson 1996) and is deconstructed into aseries of sub-dimensions such as clarity shared-ness attainability and value with regard toteam objectives
Another aspect of culture is the propensityto take risks Saleh and Wang (1993) describethis as a willingness to confront risky oppor-tunities and tolerate failure and learn fromdoing so rather than recklessly gamblingSimilarly West (1990) demonstrated thathigher levels of participative safety facilitateinnovation Participative safety is non-judgmental supportive and characterized bysocio-emotional cohesiveness The attractive-ness of the organization as a place to workand undertake innovative activities is used byGeisler (1995) as an indicator of the climatefor innovation measured by numbers of can-didates applying for positions and the ageprofile of scientists and engineers Keller(1986) offers a slightly different perspectiveon participative safety with the constructlsquogroup cohesivenessrsquo which he operational-izes using an established five-item measure
This review has described a wide variety ofmeasures proposed for organizational cultureand structure Unlike some other aspects ofinnovation management this area has receivedextensive measurement attention HoweverHolbek (1988) argues that innovating organi-zations must adopt contrasting structures andclimates as they move from the initiation tothe implementation stages of innovationChesborough and Teece (1996) and Burns andStalker (1961) argue that there is a relation-ship between organizational design and typeof innovation It is a significant gap in innova-tion measurement that there appears to be nomeasures that adequately capture or articulatethis sense of structural shift
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March 2006
Portfolio Management
The importance of portfolio management tosuccessful product innovation has recentlyemerged as a key theme in the literature Itis important because of the rapidity at whichresources are consumed in the innovationprocess and the need for these to be managed(Cebon and Newton 1999) The effectivenesswith which an organization manages its RampDportfolio is often a key determinant of itscompetitive advantage (Bard et al 1988) Thefocus of portfolio management is on makingstrategic technological and resource choicesthat govern project selection and the futureshape of the organization (Cooper et al 1999)The problems of allocation of resources evalu-ation selection and termination of projects inachieving the optimal portfolio have beenextensively investigated The models all havethe objective of devising means to allocateresources to projects to obtain the optimalbalance in the product development portfoliothat is arriving at a portfolio that optimizesthe trade-off between returns and risks
The process of selecting innovation projectsrequires evaluation and resource allocationunder uncertain conditions It is argued that asystematic process guided by clear selectioncriteria can help optimize the use of limitedresources and enhance an organizationrsquoscompetitive position (Hall and Nauda 1990)The earliest models used return on investmentas the primary decision criteria (Bard et al 1988)Following this increasingly sophisticatedmathematical tools were developed to resolvewhat Schmidt and Freeland (1992) describe asthe constrained optimization problem that isto maximize the output (according to specifiedcriteria) from a subset of available inputsThese project selection models lsquohave beenvirtually ignored by industryrsquo (Schmidt andFreeland 1992 190) Part of the reason forthis is the inherent complexity of some ofthese models but also that they fail to takeinto account organizational decision andcommunication processes More recentlymodels have tried to take account of these
more qualitative factors involved in decisionprocesses
Scoring models require respondents tospecify the merit of any project proposalaccording to a set of a priori criteria whichmay be objective or subjective (Hall andNauda 1990) Economic and benefit modelsattempt to compute the cost benefit or finan-cial risk of pursuing a specific project whilemathematical programming approaches seekto optimize some objective function(s) subjectto specified resource constraints Algorithmsof varying complexity exist requiring moni-toring and significant data entry and whilemany are conceptually attractive surveys donot show widespread utilization of thesetechniques (Hall and Nauda 1990) Theseapproaches are all based on financial meas-ures such as internal rate of return net presentvalue and return on investment At the otherend of the spectrum qualitative approachessuch as peer review and mental checklistsrely on subjective perceptions and measuresof portfolio balance (Cooper et al 2001Henriksen and Traynor 1999)
Cooper et al (1999) find that best performersuse explicit formalized tools and consist-ently apply them to all projects considered tobelong to a portfolio A series of measures canbe identified that evaluate the whole portfolioof innovation projects to answer questionssuch as lsquois it balanced in terms of quantity ofshort- and long term-projectsrsquo and lsquois there abalance between high and low risk projectsand large and small projectsrsquo (Brenner 1994Cooper et al 2001) Another set seeks to iden-tify the extent to which portfolio evaluationmeasures are formalized within the organiza-tionrsquos processes (Cebon and Newton 1999Chiesa et al 1996 Farrukh et al 2000 Millerand Friesen 1982) Yet another approach is toview project evaluation and selection as anorganizational capability and attempt to deter-mine a level of proficiency (Szakonyi 1994)Finally there is a series of post hoc measuresof the appropriateness of project selections inthe light of results and alignment with busi-ness objectives (Lee et al 1996)
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Innovation management measurement A review
Project Management
Project management is concerned with theprocesses that turn the inputs into a marketa-ble innovation The innovation process iscomplex comprising a myriad of events andactivities some of which can be identified as asequence and some of which occur concur-rently and it is clearly possible that innova-tion processes will differ to some degreeacross organizations and even within organi-zations on a project-by-project basis Havingan efficient process that is able to manage theambiguity of the innovation is universally agreedto be critical to innovation (Globe et al 1973)
Various approaches have been taken tomodelling innovation processes as a series ofevents (Zaltman et al 1973) as a social interac-tion (Voss et al 1999) as a series of transactions(Nelson and Winter 1982) and as a process ofcommunication (Farrukh et al 2000) The his-tory of project management research is partlycharacterized by a debate regarding the extentto which events and activities within the processoccur in linearly sequential discrete identifiablestages (Zaltman et al 1973) or whether eventsare more disorganized (King 1992) or evenchaotic (Koput 1997) However despite thesedifferent viewpoints there are a number ofcommon elements that can be summarized asthe major components of the innovation projectmanagement These are project efficiencytools communications and collaboration
Several studies make efforts to measureproject management efficiency mostly in theform of comparisons between budget and actual(project costs project duration revenue fore-casting) Another measure of project manage-ment success is speed Innovation speed hasbeen positively correlated with product qual-ity or the degree to which it satisfies customerrequirements measures include speed (Hauserand Zettelmeyer 1997) performance againstschedule (Chiesa and Masella 1994) and dura-tion of the process (Cebon and Newton 1999)
To achieve efficiency it is widely recom-mended that organizations seeking to innovateshould establish formal processes for innovat-
ing and make use of tools and techniquesthat may facilitate innovative endeavours Thestage-gate process (Cooper 1990) is possiblythe most familiar of these but other method-ologies for innovation project managementexist including Phased Development Productand Cycle-time Excellence and Total Design(see Jenkins et al (1997) for a discussion)These methodologies have in common theseparation of the product development processinto structured and discrete stages which eachhave milestones in the form of quality controlcheckpoints at which stopgo decisions are madewith regard to the progress of the project Thesehighly structured approaches to the manage-ment of the innovation process began toemerge in the 1990s (Veryzer 1998) The useof structured tools and processes can bemeasured by project process evaluations forexample the use of a formal problem-findingproblem-solving cycle (Bessant 2003) the useof formal post-launch evaluation procedures(Atuahene-Gima 1995) or the use of certifiedprocesses (Chiesa et al 1996) These rathergeneral process measures have been supple-mented by measures of the use of specificinstruments and tools such as interactiveCAD or CAM (Maylor 2001) or the use ofcomputer-integrated manufacturing processes(Parthasarthy and Hammond 2002) but wenote that these measures betray the technologicaland NPD heritage that underpins many of theinnovation measures identified in this reviewEquivalents for service industry public ornot-for-profit sector innovations are somewhatlacking in the literature and constitute aresearch gap
Communications are important in projectmanagement Damanpour (1991) demon-strated the existence of a positive relationshipbetween internal communication and innova-tion Internal communication facilitates thedispersion of ideas within an organizationincreases the diversity and also contributes tothe team lsquoclimatersquo Communication can bemeasured by various integration mechanismseg committees numbers of meetings andcontacts (Damanpour 1991) There are also
copy Blackwell Publishing Ltd 2006 37
March 2006
measures of external communications whichtend to focus on whether communication istaking place the level at which it occurs andwith whom (Cebon and Newton 1999 Leeet al 1996 Rothwell 1992 Souitaris 2002)These measures of internal and external com-munication in the literature are based on bothsubjective evaluations and objective frequencycounts Subjective measures include lsquowe alwaysconsult supplierscustomers on new productideasrsquo (Parthasarthy and Hammond 2002) andlsquodegree of organization members involved andparticipating in extra-organizational professionalactivitiesrsquo (Damanpour 1991) Objective countsinclude (Damanpour 1991) lsquoextent of commu-nication amongst organizational units or groupsmeasured by various integrating mechanismssuch as numbers of committees and frequencyof meetingsrsquo (Anderson and West 1998)lsquofrequency of formal meetings concerningnew ideasrsquo (Souitaris 2002 Szakonyi 1994)lsquohow well do the technical and finance peoplecommunicate with one anotherrsquo
It is widely recognized that collaboratingwith suppliers (Bessant 2003) and customers(von Hippel 1986) can also make a significantcontribution to the innovation processMeasures of collaborative working includethe use of guest engineers (Maylor 2001) thepercentage of projects in co-operation withthird parties (Kerssens-van Drongelen andBilderbeek 1999) and the extent to whichdecision-making at top levels is characterizedby cross-functional discussions (Miller andFriesen 1982) In addition Jassawalla andSashittal (1999) identify some characteristicsof internal collaboration ie that teams arecharacterized by their mindfulness levels ofat-stakeness synergy and transparency butthey do not suggest how these aspects mightbe measured which constitutes a furtherresearch gap
Commercialization
Commercialization can be considered to bethe second of the two phases in Zaltman et alrsquos(1973) conceptualization of the innovation
process that is lsquoimplementationrsquo This canmean taking an innovation to market (Chakra-vorti 2004) but may also include convincingproduction managers to adopt a series of newtechniques available to them (Single andSpurgeon 1996) Indeed the successful intro-duction of new products and services intomarkets is important for the survival andgrowth of organizations Kelm et al (1995)regard commercialization as a transitionalphase in which the organization becomesless reliant on its technological capabilities(important during the activities of initiation)but more dependent on market dynamicsCommercialization is concerned with makingthe innovative process or product a commer-cial success it includes issues such as market-ing sales distribution and joint venturesWhile technical capabilities are important forthe early stages of the innovation process anddevelopment activities for the launch andimplementation stage it is marketing capabili-ties (market investigation market testingpromotion etc) that are significant (Calantoneand di Benedetto 1988 Globe et al 1973)Verhaeghe and Kfir (2002) consider aspectsof commercialization under the headings ofmarket analysis and monitoring reaching thecustomer and market planning
Firm-level measures of the launch or com-mercialization process appear to be relativelythin In their description of the RampD processBalachandra and Brockhoff (1995) character-ize the commercialization stage as requiringlsquobig bucksrsquo market reviews and organiza-tional commitment Most measures appear tobe not much more sophisticated than thisMeasures are frequently restricted to numbersof products launched in a given period (egYoon and Lilien 1985) There is thoughsome focus on market analysis and monitor-ing (Verhaeghe and Kfir 2002) Song andParry (1996) employ a set of measures oflaunch proficiency (salesforce distributionaland promotional support) that directly addressthe lsquoadequacyrsquo of the organizationrsquos facilities inthese areas as do Avlonitis et al (2001) Andthere is a limited mention of the commercial
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Innovation management measurement A review
intentions of an organizationrsquos competitors(Calantone and di Benedetto 1988) Thethemes of proficiency of personnel in this area(eg Atuahene-Gima 1995 Cebon and New-ton 1999) of adherence to a commercializa-tion schedule (eg Griffin and Page 1993) andof formal post-launch reviews (Atuahene-Gima 1995 von Zedtwitz 2002) can also befound in the literature
Even in the work that addresses post-project reviews very little attention is directedtowards measuring innovation launch orcommercialization However this comes aslittle surprise as Hultink et al (2000) recentlyobserved that little work has been done in thearea perhaps because at least in the innova-tion literature launch activities appear to beconsidered the domain of other specialistsparticularly marketers and the process is seenas separate from innovation In their studythey investigated launch decisions associatedwith success for consumer and business-to-business products Much of the literature thatconsiders launch and commercialization doesso from the viewpoint of the adopter andassesses rates of adoption and diffusion ofinnovations over time across populations(Kessler and Chakrabarti 1996 Van DenBulte 2000)
The area of commercialization appears tobe the least developed of the issues involvedin innovation management This is a huge gapbecause without this last step the previoussteps of assembling inputs project manage-ment etc will not result in a commerciallyviable outcome for the firm We believe thatthis area of innovation is in urgent need offurther development from both theory andmeasurement viewpoints
Discussion
Innovation management measurement is acritical discipline for both academics andpractitioners The capacity of organizations toinnovate is determined by multiple factors thatrelate both to their own internal organizationand to their market environment (Rothwell
et al 1974) and the task of generating andthen converting ideas into usable and market-able products requires high levels of inter-functional co-ordination and integration Thispaper opened with the general observationthat innovation measurement does not appearto take place routinely within managementpractice and that where it does it tends tofocus on output measures Further from therelatively small number of empirical studiesof measurement in practice measurement ofinnovation management appears to be under-taken infrequently in an ad hoc fashion andrelies on dated unbalanced or under-specifiedmodels of the innovation management phe-nomenon This suggests that a large part ofthe contemporary conceptualization of theinnovation management phenomenon is over-looked in practitionersrsquo measurement prac-tices and consequently that opportunities forthe more efficient and effective managementof the innovation process are not realizedSome possible reasons for this state of affairsare failure of academics to communicate ade-quately inconsistency inaccessibility andcomplexity of measures and poor synthesisand packaging
Following a review and synthesis of theliterature we proposed a seven-dimensionalconceptualization of the innovation manage-ment phenomenon and applied it to an exam-ination of the measurement problem Throughthe application of this framework to their ownparticular context it is suggested that practi-tioners will be able to conduct an evaluationof their own innovation management activityidentify gaps weaknesses or deficiencies andalso improvement potential Further it ishoped that organizations applying the frame-work will be able to tease out areas whereinnovation is only nominally adopted in theirprocesses and identify areas where attentionand resources might be focused
From the perspective of its management itis no longer sufficient to treat innovation as alinear process where resources are channelledat one end from which emerges a new prod-uct or process The measurement framework
copy Blackwell Publishing Ltd 2006 39
March 2006
presented in Table 2 shows the breadth andvariety of elements of innovation managementthat ideally need to be measured There havebeen several studies that have investigated thelimitations of various approaches to measure-ment (eg Werner and Souder 1997) and ofspecific measures (eg Trajtenberg 1990) asthey relate to the practice of innovation Thechoice of an appropriate RampD measurementmetric depends on the userrsquos needs in terms ofcomprehensiveness of measurement type ofRampD being measured available data andamount of effort the user can afford to allocateto the exercise Nonetheless the commonciting across various papers of the measuresnoted in the innovation management frame-work presented here suggests that a base setof innovation management measures isimplicitly present in the literature eventhough they may be fragmented in appearanceand presentation By pulling together theinnovation management framework fromdiverse sources this paper aims to bring suchissues into the open and identify relevantresearch gaps Table 2 can be viewed as thebasis for a balanced scorecard (Kaplan andNorton 1992) for innovation managementthat is as a balanced set of areas that need tobe measured in order to gain insight into anorganizationrsquos holistic ability to manage inno-vation Such multidimensional approaches tomeasurement have been found in other areasof management to be an improvement on sim-ple one-dimensional measures and to be ableto capture both short- and long-term aspectsof value creation in the firm (Phelps 2004)
We have identified a large number of meas-ures and approaches in a variety of innovationmanagement areas and we have constructed ageneric set of innovation management meas-urement areas to act as a framework for bal-anced measurement However in several ofthese areas measurement gaps have beenidentified These gaps are of two types valid-ity gaps and omission gaps Validity gaps arisewhere there is insufficient evidence that pro-posed measures actually do capture drivers oroutputs of innovation management for example
we have noted the objections to counts ofpatents or increasing expenditure on RampD beingused as measures of innovative organizationsSimilarly there is an absence of evidence thatthe large number of subjective perceptions ofinnovation management practices proposed(lsquowe do Arsquo lsquowe are good at Brsquo) actually relateto innovation management performance
Omission gaps occur where the importanceof an aspect of innovation management is sup-ported in the literature but measures for thisaspect are lacking Omission gaps are particu-larly prevalent in the elements of innovationmanagement such as knowledge managementinnovation strategy and commercializationthat do not feature strongly in the literature ontechnological and manufacturing-based inno-vation Another area traditionally not givenmuch emphasis in this literature is organiza-tion and culture which fortunately is bettertreated by the organizational behaviour litera-ture where a number of measures have beendeveloped Much of the current state of meas-urement practice can be traced back to the dis-ciplinersquos early manufacturing RampD and NPDfocus While product innovation is undoubt-edly important it is only one dimension of anorganizationrsquos innovation agenda Process andorganizational innovations are recognizedtoo as critical for competitiveness yet theseperspectives are inadequately represented inmeasurement terms
General areas of omission in this fieldrelate to an over-reliance on financial meas-ures rather than process measures for exam-ple the use of financial measures of portfoliooptimization but an absence of portfoliocapability measures a similar reliance oncodified knowledge such as patents to theexclusion of more intangible measures suchas tacit knowledge the measurement of levelsof resources or activities with no indication ofwhat an optimal level would be the measure-ment of drivers of innovation without meas-ures of whether these drivers are aligned witheach other and with firm strategy measures ofpresence that do not measure quality (eg theuse of dichotomous (yesno) measures that do
40 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
not indicate how well an action is implementedand measures of the presence of leadership(such as champions) but not of quality ofleadership) a general absence of measuresfor important properties of organizationalstructures such as flexibility and a lack ofmeasures of the match between structure andenvironment a technological and NPD bias toproject management measures and a relativeabsence of measures for service sectors apaucity of measures for internal communica-tions and a general lack of measures forcommercialization management ndash in particulararound marketing and sales capabilities forinnovative products and services All thesegaps provide the potential for further researchin innovation management measurement
The absence of an accepted framework ofinnovation management measures leads notonly to the gaps identified above but also toother problems in the literature One is that itis frequently unclear whether or not the met-rics used are of the researchersrsquo own devisingdrawn from the literature or are what are usedby the organizations being studied Nor is italways clear when metrics are devised orrecommended whether they are intended foruse in a research capacity or for managementtasks Further the measures proposed in theliterature often seem to be proposed abstractlywith little consideration given to the use ofmeasures as a management tool in the day-to-day context of managing innovation In theabsence of a comprehensive framework forinnovation management measurement organ-izations will inevitably resort to ad hoc andpartial metrics which can encourage wastefulpractice (eg measuring innovation managementcapability according to annual RampD spend)We hope that the framework constructed inthis paper will be useful in the constructionof comprehensive measures of innovationmanagement
Acknowledgements
The research reported here was supported bya grant from Cranfield School of Management
the authors gratefully acknowledge this supportFurther the authors are grateful to the editorsand two anonymous reviewers for their helpfuland insightful comments on previous versionsof this paper
Note
1 Corresponding author Telephone +44 (0) 207594 9137 e-mail radamsimperialacuk
References
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Amabile TM (1998) How to kill creativity HarvardBusiness Review SeptemberndashOctober 77ndash87
Amabile TM Conti R Coon H Lazenby J andHerron M (1996) Assessing the work environ-ment for creativity Academy of Management Jour-nal 39 1154ndash1184
Ambrosini V and Bowman C (2001) Tacit know-ledge some suggestions for operationalisationJournal of Management Studies 38 811ndash829
Anderson N and West MA (1996) The teamclimate inventory development of the TCI and itsapplications in teambuilding for innovativenessEuropean Journal of Work and Organizational Psy-chology 5 53ndash66
Anderson NR and West MA (1998) Measuringclimate for work group innovation developmentand validation of the team climate inventory Jour-nal of Organizational Behavior 19 235ndash258
Atuahene-Gima K (1995) An exploratory analysisof the input of market orientation on new productperformance a contingency approach Journal ofProduct Innovation Management 12 275ndash293
Avlonitis GJ Papastathopoulou PG and Gounaris SP(2001) An empirically-based typology of productinnovativeness for new financial services success
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March 2006
and failure scenarios Journal of Product Innova-tion Management 18 324ndash342
Balachandra R and Brockhoff K (1995) Are RampDproject termination factors universal Research-Technology Management 38 31ndash36
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Barclay I (1992) The new product developmentprocess part 2 Improving the process of new prod-uct development RampD Management 4 307ndash317
Bard JF Balachandra R and Kaufmann PE(1988) An interactive approach to RampD projectselection and termination IEEE Transactions onEngineering Management 35 139ndash146
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Bess G (1998) A first stage organization life cyclestudy of six emerging nonprofit organizations inLos Angeles Administration in Social Work 2235ndash52
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Bessant J and Francis D (1997) Implementing thenew product development process Technovation17 189ndash197
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Brenner MS (1994) Practical RampD project prioriti-zation Research Technology Management 37 38ndash43
Brown MG and Svenson RA (1988) MeasuringRampD productivity Research-Technology Manage-ment JulyndashAugust 11ndash15
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Burns TR and Stalker GM (1961) The Manage-ment of Innovation London Tavistock
Calantone RJ and di Benedetto CA (1988) Anintegrative model of the new product developmentprocess an empirical validation Journal of Prod-uct Innovation Management 5 201ndash215
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Chakravorti B (2004) The new rules for bringinginnovations to market Harvard Business Review82 58ndash67
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Chiesa V Coughlan P and Voss A (1996) Devel-opment of a technical innovation audit Journal ofProduct Innovation Management 13 105ndash136
Cohen WM and Levinthal DA (1990) Absorptivecapacity a new perspective on learning and inno-vation Administrative Science Quarterly 35 128ndash152
Cooper RG (1979a) The dimensions of industrialnew product success and failure Journal of Mar-keting 43 93ndash103
Cooper RG (1979b) Identifying industrial newproduct success Project NewProd Industrial Mar-keting Management 8 124ndash135
Cooper RG (1984) The strategyndashperformance linkin product innovation RampD Management 14 247ndash259
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Innovation management measurement A review
Cooper RG (1990) Stage-gate systems a new toolfor managing new products Business Horizons 3344ndash56
Cooper RG and Kleinschmidt EJ (1990) Newproduct success factors a comparison of lsquokillsrsquoversus successes and failures RampD Management20 47ndash64
Cooper RG and Kleinschmidt EJ (1995) Bench-marking the firmrsquos critical success factors in newproduct development Journal of Product Innova-tion Management 12 374ndash391
Cooper RG Edgett SJ and Kleinschmidt EJ(1999) New product portfolio management prac-tices and performance Journal of Product Innova-tion Management 16 333ndash351
Cooper RG Edgett SJ and Kleinschmidt EJ(2001) Portfolio Management for New Products2nd edition Cambridge MA Perseus
Cooper RG Edgett SJ and Kleinschmidt EJ (2004)Benchmarking best NPD practices Research-Technology Management 47 50ndash59
Cordero R (1990) The measurement of innovationperformance in the firm an overview ResearchPolicy 19 185ndash192
Cormican K and OrsquoSullivan D (2004) Auditingbest practice for effective product innovationmanagement Technovation 24 819ndash829
Coughlan P Chiesa V and Voss C (1994) Evalu-ating leadership as an enabler of innovation InProceedings 2nd International Product Develop-ment Management Conference GothenburgSweden 30ndash31 May Brussels European Institutefor Advanced Studies in Management
Covin JG and Slevin DP (1989) Strategic manage-ment of small firms in hostile and benign environ-ments Strategic Management Journal 10 75ndash87
Daft R (1978) A dual-core model of organizationalinnovation Academy of Management Journal 21193ndash210
Damanpour F (1991) Organizational innovation ameta-analysis of effects of determinants and mod-erators Academy of Management Journal 34 555ndash590
Damanpour F (1996) Organizational complexity andinnovation developing and testing multiple contin-gency models Management Science 42 693ndash716
Davis MC (1998) Knowledge management Infor-mation Strategy The Executiversquos Journal 15 11ndash22
De Brentani U (1991) Success factors in developingnew business services European Journal of Mar-keting 25 33ndash60
De Leede J Nijhof AH and Fisscher OA (1999)The myth of self managing teams a reflection onthe allocation of responsibilities between individu-als teams and the organisation Journal of BusinessEthics 21 203ndash215
Deeds DL (2001) The role of RampD intensitytechnical development and absorptive capacity increating entrepreneurial wealth in high technologystart-ups Journal of Engineering and TechnologyManagement 18 29ndash47
Denyer D and Neely A (2004) Introduction to spe-cial issue innovation and productivity performancein the UK International Journal of ManagementReviews 45 131ndash135
Di Benedetto CA (1996) Identifying the key suc-cess factors in new product launch Journal ofProduct Innovation Management 16 530ndash544
Dodgson M and Hinze S (2000) Indicators used tomeasure the innovation process defects and possi-ble remedies Research Evaluation 8 101ndash114
Dougherty D and Cohen M (1995) Product inno-vation in mature firms In Bowman E and KogutB (eds) Redesigning the Firm New York OxfordUniversity Press
Dougherty D and Hardy C (1996) Sustained prod-uct innovation in large mature organizations over-coming innovation-to-organization problemsAcademy of Management Journal 39 1120ndash1153
DTI (1998) An Audience With Innovation Innovationin Management London Department of Trade andIndustry
Dyer B and Song XM (1998) Innovation strategyand sanctioned conflict a new edge in innovationJournal of Product Innovation Management 15505ndash519
Ekvall G (1996) Organizational climate for creativ-ity and innovation European Journal of Work andOrganizational Psychology 5 105ndash123
Ernst H (2002) Success factors of new productdevelopment a review of the empirical literatureInternational Journal of Management Reviews 41ndash40
Farrukh C Phaal R Probert D Gregory M andWright J (2000) Developing a process for therelative valuation of RampD programmes RampDManagement 30 43ndash53
Frenkel A Maital S and Grupp H (2000) Meas-uring dynamic technical change a technometricapproach International Journal of TechnologyManagement 20 429ndash441
Galunic DC and Rodan S (1998) Resource recom-binations and the firm knowledge structures and
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the potential for Schumpeterian innovationStrategic Management Journal 19 1193ndash1201
Geisler E (1995) An integrated costndashperformancemodel of research-and-development evaluationOmega ndash International Journal of ManagementScience 23 281ndash294
Glaser BG and Strauss AL (1967) The Discoveryof Grounded Theory Strategies for QualitativeResearch London Aldine
Globe S Levy GW and Schwartz CM (1973)Key factors and events in the innovation processResearch Management 16 8ndash15
Goffin K and Pfeiffer R (1999) Innovation Man-agement in UK and German Manufacturing Com-panies London Anglo-German Foundation for theStudy of Industrial Society
Grant RM (1991) The resource-based theory ofcompetitive advantage implications for strategyformulation California Management Review 33114ndash135
Greve HR (2003) A behavioral theory of RampDexpenditures and innovations evidence fromshipbuilding Academy of Management Journal 46685ndash702
Griffin A (1997) PDMA research on new productdevelopment practices updating trends and bench-marking best practices Journal of Product Innova-tion Management 14 429ndash458
Griffin A and Page AL (1993) An interim reporton measuring product development success andfailure Journal of Product Innovation Manage-ment 10 291ndash308
Griliches Z (1990) Patent statistics as economicindicators a survey Journal of Economic Litera-ture 28 1661ndash1707
Hall DL and Nauda A (1990) An interactiveapproach for selecting IRampD projects IEEE Trans-actions on Engineering Management 37 126ndash133
Hauser JR and Zettelmeyer F (1997) Metrics toevaluate RDampE Research-Technology Manage-ment 40 32ndash38
Henriksen AD and Traynor AJ (1999) A practicalRampD project-selection scoring tool IEEE Trans-actions on Engineering Management 46 158ndash170
Hipp C and Grupp H (2005) Innovation in theservice sector the demand for service specific-innovation measurement concepts and typologiesResearch Policy 34 517ndash535
Holbek J (1988) The innovation design dilemmasome notes on its relevance and solutions InGroslashnhaug K and Kaufmann G (eds) Innovation
A Cross-Disciplinary Perspective NorwegianUniversity Press pp 253ndash277
Hope Hailey V (2001) Breaking the mould Innova-tion as a strategy for corporate renewal Inter-national Journal of Human Resource Management12 1126ndash1140
Hull R Coombs R and Peltu M (2000) Know-ledge management practices for innovation anaudit tool for improvement International Journalof Technology Management 20 633ndash656
Hultink EJ Hart S Robben HSJ and Griffin A(2000) Launch decisions and new product successan empirical comparison of consumer and indus-trial products Journal of Product Innovation Man-agement 17 5ndash23
Jassawalla AR and Sashittal HC (1999) Buildingcollaborative cross-functional new product teamsAcademy of Management Executive 13 50ndash63
Jenkins S Forbes S Durrani TS and BanerjeeSK (1997) Managing the product developmentprocess 1 An assessment International Journal ofTechnology Management 13 359ndash378
Kaplan RS and Norton DP (1992) The balancedscorecard ndash measures that drive performance HarvardBusiness Review JanuaryndashFebruary 71ndash79
Keller RT (1986) Predictors of performance ofproject groups in RampD organizations Academy ofManagement Journal 29 715ndash726
Kelm KM Narayanan VK and Pinches GE (1995)Shareholder value creation during research-and-development innovation and commercialization stagesAcademy of Management Journal 38 770ndash786
Kerssens-van Drongelen IC and Bilderbeek J(1999) RampD performance measurement morethan choosing a set of metrics RampD Management29 35ndash46
Kerssens-van Drongelen IC and de Weerd-Nederhof PC (1999) The use of performancemeasurement tools for balancing short- and long-term NPD performance International Journal ofInnovation Management 3 397ndash426
Kessler EH and Chakrabarti AK (1996) Innova-tion speed a conceptual model of context anteced-ents and outcomes Academy of ManagementReview 21 1143ndash1191
Kim B and Oh H (2002) An effective RampD per-formance measurement system survey of KoreanRampD researchers Omega ndash International Journalof Management Science 30 19ndash31
Kim J and Wilemon D (2002) Strategic issues inmanaging innovationrsquos fuzzy front-end EuropeanJournal of Innovation Management 5 27ndash39
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Innovation management measurement A review
Kimberly JR (1981) Managerial innovation InNystrom PC and Starbuck WH (eds) Handbookof Organizational Design Vol 1 New YorkOxford University Press pp 84ndash104
King N (1992) Modelling the innovation process anempirical comparison of approaches Journal ofOccupational and Organizational Psychology 6589ndash100
Kirton MJ (1976) Adaptors and innovators adescription and measure Journal of Applied Psy-chology 61 622ndash629
Kivimaumlki M Kuk G Elovainio M Thomson LKalliomaumlki-Levanto T and Heikkilauml A (1997)The team climate inventory (TCI) ndash four or fivefactors Testing the structure of TCI in samples oflow and high complexity jobs Journal of Occupa-tional and Organizational Psychology 70 375ndash389
Kivimaumlki M Lansisalmi H Elovainio M Heik-kila A Lindstrom K Harisalo R Sipila K andPuolimatka L (2000) Communication as a deter-minant of organizational innovation RampD Man-agement 30 33ndash42
Kleinknecht A (1987) Measuring RampD in smallfirms how much are we missing Journal of Indus-trial Economics 36 253ndash256
Koen P Ajamian G Burkart R Clamen ADavidson J DrsquoAmore R Elkins C Herald KIncorvia M Johnson A Karol R Seibert RSlavejkov A and Wagner K (2001) Providingclarity and a common language to the lsquofuzzy front endrsquoResearch-Technology Management 44 46ndash55
Koput K (1997) A chaotic model of innovativesearch some answers many questions Organiza-tion Science 8 528ndash542
Lawrence PR and Lorsch JW (1967) Organizationand Environment Harvard MA Harvard Univer-sity Press
Lee M Son B and Lee H (1996) Measuring RampDeffectiveness in Korean companies Research-Technology Management 39 28ndash31
Leonard D and Sensiper S (1998) The role of tacitknowledge in group innovation California Man-agement Review 40 112ndash132
Leseure M Birdi K Bauer J Denyer D andNeely A (2004) Adoption of Promising PracticeA Systematic Review of the Literature LondonAdvanced Institute of Management Research
Li HY and Atuahene-Gima K (2001) Productinnovation strategy and the performance of newtechnology ventures in China Academy of Man-agement Journal 44 1123ndash1134
Liao J Welsch H and Stoica M (2003) Organiza-tional absorptive capacity and responsivenessan empirical investigation of growth-orientedSMEs Entrepreneurship Theory and Practice 2863ndash86
Linstone HA and Turoff M (eds) (2002) The Del-phi Method Techniques and Applications httpwwwisnjitedupubsdelphibook
Loch C Stein L and Terwiesch C (1996) Meas-uring development performance in the electronicsindustry Journal of Product Innovation Manage-ment 13 3ndash20
Mathisen GE and Einarsen S (2004) A review ofinstruments assessing creative and innovative envi-ronments within organizations Creativity ResearchJournal 16 119ndash140
Maylor H (2001) Assessing the relationshipbetween practice changes and process improve-ment in new product development Omega ndashInternational Journal of Management Science 2985ndash96
McAdam RMS (1999) The process of knowledgemanagement within organizations a critical assess-ment of both theory and practice Knowledge andProcess Management 6 101ndash113
McManus RJ Wilson S Delaney BC Fitzmau-rice DA Hyde CJ Tobias RS Jowett S andHobbs FDR (1998) Review of the usefulness ofcontacting other experts when conducting a litera-ture search for systematic reviews British MedicalJournal 317 1562ndash1563
Miles RE and Snow CC (1978) Organization StrategyStructure and Process New York McGraw-Hill
Miller D and Friesen PH (1982) Innovation inconservative and entrepreneurial firms two modelsof strategic momentum Strategic ManagementJournal 3 1ndash24
Mintzberg H (1978) Patterns in strategy formationManagement Science 24 934ndash948
Mitroff I (1987) Business Not As Usual Rethinkingour Individual Corporate and Industrial Strategiesfor Global Competition London Jossey-Bass
Moenaert RK De Meyer A Souder WE andDeschoolmeester D (1995) RampDMarketing com-munication during the fuzzy front-end IEEETransactions on Engineering Management 42243ndash257
Neely A and Hii J (1998) Innovation and BusinessPerformance A Literature Review Report producedfor Government Office for the Eastern RegionCambridge The Judge Institute of ManagementStudies University of Cambridge
copy Blackwell Publishing Ltd 2006 45
March 2006
Nelson R and Winter G (1982) An EvolutionaryTheory of Economic Change Cambridge MABelknap Press
Nohria N and Gulati R (1996) Is slack good or badfor innovation Academy of Management Journal39 1245ndash1264
Nonaka I (1991) The knowledge-creating companyHarvard Business Review NovemberndashDecember96ndash104
Nonaka I and Takeuchi H (1995) The KnowledgeCreating Company How Japanese CompaniesCreate the Dynamics of Innovation New YorkOxford University Press
OrsquoBrien JP (2003) The capital structure implica-tions of pursuing a strategy of innovation StrategicManagement Journal 24 415ndash431
OrsquoReilly CA and Tushman ML (1997) Using cul-ture for strategic advantage promoting innovationthrough social control In Tushman ML andAnderson P (eds) Managing Strategic Innovationand Change A Collection of Readings New YorkOxford University Press pp 200ndash216
Oliver N Dewberry E and Dostaler I (1999) Newproduct development performance and practice aninternational benchmarking study in the consumerelectronics industry In Proceedings 6th Inter-national Product Development Management Confer-ence Cambridge UK Brussels European Institutefor Advanced Studies in Management
Pakes A and Griliches Z (1980) Patents and RampDat the firm level a first report Economic Letters 5377ndash381
Parthasarthy R and Hammond J (2002) Productinnovation input and outcome moderating effectsof the innovation process Journal of Engineeringand Technology Management 19 75ndash91
Patterson F (2003) Innovation potential indicatorAvailable at wwwoppcouk
Phelps B (2004) Smart Business Metrics MeasureWhat Really Counts and Manage What Makes theDifference London FT-Prentice Hall
Pinto JK and Prescott JE (1988) Changes in crit-ical success factors over the stages in the projectlife cycle Journal of Management 14 5ndash18
Pitt M and Clarke K (1999) Competing on compe-tence a knowledge perspective on the managementof strategic innovation Technology Analysis andStrategic Management 11 301ndash316
Pittaway L Robertson M Munir K Denyer D andNeely A (2004) Networking and Innovation in theUK a Systematic Review of the Literature LondonAdvanced Institute of Management Research
Porter ME and Ketels CHM (2003) UK Compet-itiveness Moving to the Next Stage DTI Econom-ics Paper No 3 URN 03899
Pugh DS Hickson DJ Hinings CR and TurnerC (1969) The context of organization structuresAdministrative Science Quarterly 14 91ndash114
Ramanujam V and Mensch GO (1985) Improvingthe strategyndashinnovation link Journal of ProductInnovation Management 2 213ndash223
Richard O McMillan A Chadwick K and DwyerS (2003) Employing an innovation strategy inracially diverse workforces ndash effects on firm per-formance Group amp Organization Management 28107ndash126
Rickards T (1991) Innovation and creativity treesand pathways RampD Management 21 97ndash108
Rochford L (1991) Generating and screening newproduct ideas Industrial Marketing Management20 287ndash296
Rothwell R (1992) Successful industrial innovationcritical factors for the 1990s RampD Management22 221ndash239
Rothwell R Freeman C Horseley A JervisVTP Robertson AB and Townsend J (1974)SAPPHO updated ndash Project SAPPHO phase IIResearch Policy 3 258ndash291
Saleh SD and Wang CK (1993) The managementof innovation ndash strategy structure and organiza-tional climate IEEE Transactions on EngineeringManagement 40 14ndash21
Schmidt RL and Freeland JR (1992) Recentprogress in modelling RampD project-selection proc-esses IEEE Transactions on Engineering Manage-ment 39 189ndash201
Schroeder RG Van de Ven AH Scudder GDand Polley D (1989) The development of innova-tion ideas In Van de Ven AH Angle HL andPoole M (eds) Research on the Management ofInnovation The Minnesota Studies New YorkHarper amp Row pp 107ndash133
Scott S and Bruce R (1994) Determinants ofinnovative behaviour a path model of individualinnovation Academy of Management Journal 37580ndash607
Shane S Venkataraman S and MacMillan I (1995)Cultural differences in innovation championingstrategies Journal of Management 21 931ndash952
Shepard HA (1967) Innovation-resisting and inno-vation producing organizations Journal of Busi-ness 40 470ndash477
Shin J and McClomb GE (1998) Top executiveleadership and organizational innovation an
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Innovation management measurement A review
empirical investigation of nonprofit human serviceorganizations (HSOS) Administration in SocialWork 22 1ndash21
Single AW and Spurgeon WM (1996) Creatingand commercializing innovation inside a skunkworks Research-Technology Management 39 38ndash41
Song XM and Parry ME (1996) What separatesJapanese new product winners from losersJournal of Product Innovation Management 13422ndash439
Souitaris V (2002) Firm-specific competenciesdetermining technological innovation a survey inGreece RampD Management 32 61ndash77
Stock GN Greis NP and Fischer WA (2001)Absorptive capacity and new product developmentJournal of High Technology ManagementResearch 12 77ndash91
Sundbo J (1997) Management of innovation inservices Service Industries Journal 17 432ndash455
Sveiby KE (1997) The New Organizational WealthManaging and Measuring Knowledge-BasedAssets San Francisco CA Berrett-Koehler
Szakonyi R (1994) Measuring RampD effectiveness IResearch-Technology Management 37 27ndash32
Thompson L (2003) Improving the creativity oforganizational work groups Academy of Manage-ment Executive 17 96ndash109
Tidd J Bessant J and Pavitt K (1997) ManagingInnovation Integrating Technological Market andOrganizational Change Chichester UK JohnWiley
Tipping J and Zeffren E (1995) Assessing thevalue of your technology ResearchndashTechnologyManagement 38 22ndash40
Trajtenberg M (1990) A penny for your quotes ndashpatent citations and the value of innovations RandJournal of Economics 21 172ndash187
Tranfield D Denyer D and Smart P (2003)Towards a methodology for developing evidence-informed management knowledge by means of asystematic review British Journal of Management14 207ndash222
Tsai W (2001) Knowledge transfer in intraorganiza-tional networks effects of network position andabsorptive capacity on business unit innovation andperformance Academy of Management Journal44 996ndash1004
Van Den Bulte C (2000) New product diffusionacceleration measurement and analysis MarketingScience 19 366ndash380
Verhaeghe A and Kfir R (2002) Managing innovationin a knowledge intensive technology organisation(KITO) RampD Management 32 409ndash417
Verworn B (2002) The fuzzy front end of productdevelopment an exploratory study In Proceedings9th International Product Development ManagementConference Sophia Antipolis France pp 863ndash878Brussels European Institute for Advanced Studiesin Management
Veryzer RW (1998) Discontinuous innovation andthe new product development process Journal ofProduct Innovation Management 15 304ndash321
Volberda HW (1996) Towards the flexible formhow to remain vital in hypercompetitive environ-ments Organizational Science 7 359ndash374
Von Hippel E (1986) Lead users a source of novelproduct concepts Management Science 32 791ndash805
Von Zedtwitz M (2002) Organizational learningthrough post-project reviews in RampD RampD Man-agement 32 255ndash268
Voss C Chase R and Roth A (1999) Internationalservice study Decision Line May 4ndash7
Vyakarnam S and Adams RJ (2001) Institutionalbarriers to enterprise support an empirical studyEnvironment and Planning C Government andPolicy 19 335ndash353
Werner BM and Souder WE (1997) MeasuringRampD performance ndash state of the art Research-Technology Management 40 34ndash42
West MA (1990) The social psychology of innova-tion in groups In West MA and Farr JL (eds)Innovation and Creativity at Work Psychologicaland Organizational Strategies Chichester UKJohn Wiley pp 309ndash333
West MA and Anderson NR (1996) Innovation intop management teams Journal of Applied Psychol-ogy 81 680ndash693
White A (2002) Enabling factors in the front end ofthe innovation process In Proceedings 9thInternational Product Development ManagementConference Sophia Antipolis France BrusselsEuropean Institute for Advanced Studies inManagement pp 879ndash887
Wolfe RA (1994) Organizational innovationreview critique and suggested research direc-tions Journal of Management Studies 31 405ndash431
Yoon E and Lilien GL (1985) A new productlaunch-time decision model Journal of ProductInnovation Management 3 134ndash144
Zahra SA and George G (2002) Absorptivecapacity a review reconceptualization and
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March 2006
extension Academy of Management Review 27185
Zaltman G Duncan R and Holbek J (1973) Inno-vations and Organizations New York John Wiley
Zien KA and Buckler SA (1997) From experiencedreams to market crafting a culture of innovationJournal of Product Innovation Management 14274ndash287
Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
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March 2006
but with some changes to suit the exigenciesof our question and data sources notably firstthe inclusion of a Delphi study and second arelaxation of the requirement for reproduciblecriteria for document selection and appraisal
The authors formed a review panel consist-ing of domain-relevant experts from a rangeof disciplines with an interest in both innova-tion and measurement Time was spent outlin-ing the research project which was articulatedin terms of the fragmented world of com-peting and contradictory measures addressingthe issue of the management of innovationRather than attempting to generate an exhaus-tive list our objectives were defined in termsof the collation and synthesis of measuresbetter reflecting the needs of academics andpractitioners we ask lsquoWhat are the measuresthat have been used and to what extent dothey adequately populate and dimensionalizea comprehensive analytic frameworkrsquo
McManus et al (1998) reflecting upon sys-tematic review identified the limitations ofsearching electronic databases as sometimesuncovering only half the relevant studies Theyattribute this in part to a lack of sensitivity ofelectronic databases Indeed this may accountfor the disappointing outcome in terms ofbreadth that Leseure et al (2004) report fromtheir search of electronic databases for litera-ture relating to the adoption of promisingpractices Compensating strategies includeeither hand searching of journals (which wehad to discount on the grounds of time andcost) or consultation with appropriate experts(McManus et al 1998) The latter are partic-ularly important when lsquoperforming a system-atic review in a developing field that does nothave a clearly defined specialist literaturersquo(McManus et al 1998 1563) Using the Del-phi method a process consisting of structureddesign for group communication relating tocomplex problems (Linstone and Turoff 2002)we extended our consultation process toincorporate the input of external experts
A list of global experts in innovation andmeasurement (n = 100) based on the knowledgeof the review panel was developed Potential
respondents were contacted by e-mail and askedto respond to a series of questions relating toinnovation metrics at the level of manage-ment practice particularly addressing aspectsof measuring the existence and effectivenessof the innovation management processThere was a high degree of consensus in the28 responses received All respondents recog-nized the existence of a plethora of extantmeasures obviating the need for new meas-ures to be developed Specifically an absenceof measures well aligned to the activities ofthe innovation process was noted Furtherour attention was drawn to the absence ofdevices to help identify the appropriatemetrics to apply
Systematic review stresses the importanceof an audit trail in the review process toensure clarity and replicability Significant tothis is the use of explicit reproducible criteriain the selection of articles for review and anappraisal of the quality of the research and thestrength of the findings (Tranfield et al 2003)However regardless of a studyrsquos methodologyor generalizability it might still incorporatemeasures of innovation management that couldcontribute to the construction of a measure-ment framework and so grey literature isincluded in this review As we were notreviewing an evidence base in the normallyaccepted use of the term quality criteria asused in previously published systematic reviewsin the management literature (eg Leseureet al 2004 Pittaway et al 2004) in which thevalue of the evidence base is determined byassessed levels of theory robustness method-ology implications for practice generalizabilityand contribution were felt not to be whollyrelevant in this case We instead adopted aposition akin to Glaser and Straussrsquos (1967)notion of lsquotheoretical saturationrsquo which isachieved when
no additional data are being found whereby theresearcher can develop properties of the categoryAs he sees similar instances over and over againthe researcher becomes empirically confident thata category is saturated hellip when one category is
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Innovation management measurement A review
saturated nothing remains but to go on to newgroups for data on other categories and attempt tosaturate these categories also (Glaser and Strauss1967 65)
That is the incremental contribution of furthersampling is marginal and fails to add significantvalue The steps of our review are presented inTable 1
A plethora of studies operationalize meas-ures of aspects of innovation managementhowever to provide some synthesis and iden-tify gaps agreement regarding the nature ofinnovation management is needed The litera-ture lacks such consensus The concept is fre-quently disaggregated into component partsand scholars adopt their own partial views Asa result the operationalization of measures isfrequently idiosyncratic owing more to thepredilections of the researcher and the exigen-cies of the data than to the overarching objec-tives of synthesis or cumulation To organizecompare and contrast such measures we pro-pose a typology of elements of the innovationmanagement process
Many scholars have sought to identify thekey activities of the innovation managementprocess (Wolfe 1994) some of which are pre-sented as linear models (eg Daft 1978) andothers that are dynamic and recursive charac-terized by feedback and feed-forward loops(eg Schroeder et al 1989) While usefulthese models are limited from a measurementperspective first there are many competingmodels with consensus only evident at abstractlevels second models have principally been
generated in the context of technology and sogeneralizability is constrained third with afocus on activities models fail to take accountof the organizational pervasiveness of innova-tion and its socio-technical connectedness withall aspects of the organization or the levelsof integration envisaged in Rothwellrsquos (1992)fifth-generation process model Finally whilethe range and sequence of activities may varyacross organizations and projects their success-ful management is affected by a number offactors Cebon and Newton (1999) call thisthe lsquocapacity to make changersquo about whichthe literature generally is relatively silent(Neely and Hii 1998) Based on a review ofmodels we propose a seven-factor frameworkof meaningful categories specified in terms ofthe requisite organizational capabilities tomake and manage change (see Table 2)
In a review of the factors associated withnew product development (NPD) success Ernst(2002) echoes Cooper and Kleinschmidtrsquos(1995) influential five techno-centric factorsfor new product performance NPD processNPD strategy organization culture and manage-ment commitment This model though over-looks innovation in non-technical contextsand other important factors such as the role ofknowledge (Leonard and Sensniper 1998)
In their technical innovation audit toolChiesa et al (1996) describe process andperformance as the two foci of innovationmanagement measures They overlay lsquocoreprocessesrsquo with a set of lsquoenabling processesrsquothe latter describing the deployment ofresources and the effective use of appropriatesystems and tools governed by top manage-ment leadership and direction Finding thisapplicable only to lsquohardrsquo innovations Ver-haeghe and Kfir (2002) extended the audittool to an investigation of the processes thatsupport and enable both lsquohardrsquo and lsquosoftrsquo (ega research or consultancy project) innovationThe changes they made may appear semanticfor instance relabelling lsquoprocess innovationrsquo aslsquotechnology transferrsquo However the importantimplication is that the study extends the appli-cation of the instrument to service contexts
Table 1 Review strategy
Step 1 Establish review team and scope and nature of the question and search strings
Step 2 Undertake Delphi investigationStep 3 Preliminary search of electronic databasesStep 4 Develop analytic frameworkStep 5 Secondary search of electronic databases and
Delphi studyStep 6 Content analysis of data set sorting of
measures into first order categories defined by the analytic framework
Step 7 Review measures against framework for gaps
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ell Publishing Ltd 200625
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2006
Table 2 Innovation management models and organizing framework
Cooper and Kleinschmidt (1995)
Chiesa et al (1996)
Cormican and OrsquoSullivan (2004)
Goffin and Pfeiffer (1999) Burgelman et al (2004)
Verhaeghe and Kfir (2002)
Inputs Creativity and human resources
Resource availability Idea generation Technology acquisition
Knowledge management
Resource provision
Understand relevant technological developments and competitor strategies
Networking
Strategy NPD strategy Strategy and leadership
Innovation strategy
Strategic management
Organization and culture
Organizational culture Managementcommitment
Leadership Culture and climate
Structural and cultural context of the organization
Portfolio management
NPD process Systems and tools
Planning and selection
Portfolio management
Project management Communication and collaboration
Project management
Development
Commercialization Structure and performance
Commercialization
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Innovation management measurement A review
Furthermore they explicitly bounded theirmodel with notions of inputs and commercial-ized outputs
Cormican and OrsquoSullivan (2004 820) reflect-ing earlier studiesrsquo coverage of the organizationof innovation conceive of product innovationas a continuous and cross-functional processlsquoinvolving and integrating a growing numberof different competencies [inside the organiza-tion]rsquo So effective management of the processrequires successful adoption and adaption of asocio-technical systems approach to all aspectsof the organization critically including peopleand process as well as technology-relatedissues
While there are areas of commonalityacross these innovation management modelsno one model covers every dimension Thissuggests a need for a synthetic and integrativeframework to promote comparability and toenable future work to build on results found inprevious studies In column 1 of Table 2 wepresent such a framework derived from asynthesis of the studies presented in the othercolumns of the table The framework consistsof seven categories inputs knowledge manage-ment strategy organization and culture port-folio management project management andcommercialization
In the following sections we use these seveninductively derived categories as the organiz-ing framework for a discussion of innovationmanagement measurement For each of thesecategories we review the diverse literaturerelevant to the measurement of that typologicalcategory Within each category a series of sub-dimensions of measurement focus are identi-fied reflecting the distinctions and emphasesin the literature (see Table 3)
Measures of Innovation Management
Inputs Management
Inputs management is concerned with theresourcing of innovation activities and includesfactors ranging from finance to human andphysical resources to generating new ideas
The construct research and development (RampD)intensity has frequently been used as a globalmeasure of input Typically it is expressed asa ratio between expenditure (eg Parthasarthyand Hammond 2002) or numbers employedin RampD roles (Kivimaumlki et al 2000) and someexpression of output The relationship betweenRampD intensity and firm or innovation per-formance has been empirically demonstratedin several studies (eg Deeds 2001 Greve2003 Parthasarthy and Hammond 2002)However there is some equivocality in the lit-erature Stock et al (2001) note an inverted-Urelationship between RampD intensity and NPDperformance and Bougrain and Haudeville(2002) point out that it does not influence thefuture prospects of a project and is indeed animperfect measure of innovation activityFurther RampD is only one of several inputs intothe innovation process and therefore cannotbe regarded as an adequate proxy it also doesnot appear to be a very useful measure forsmall and medium-sized enterprises (SMEs)which may not have formal RampD activities ormay not record them (Kleinknecht 1987) orindeed for service industries which tend to havelow RampD intensity (Hipp and Grupp 2005)
Table 3 Innovation management measurement areas
Framework category Measurement areas
Inputs People Physical and financial resources Tools
Knowledge management
Idea generation Knowledge repository Information flows
Innovation strategy Strategic orientation Strategic leadership
Organization and culture
Culture Structure
Portfolio management
Riskreturn balance Optimization tool use
Project management Project efficiency Tools Communications Collaboration
Commercialization Market research Market testing Marketing and sales
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March 2006
High levels of RampD intensity are thereforenot necessarily evidence of good innovationpractice they may simply mask process inef-ficiencies (Cebon and Newton 1999 Dodgsonand Hinze 2000) However adequate fundingis clearly a critical input into the innovationprocess Expenditure data have long been apopular proxy measure of innovation inputlargely because of their ready availabilitySeveral different approaches both qualitativeand quantitative to measuring funding canbe identified total expenditure expenditureexpressed as a proportion of sales or revenuesand expenditure by item (organizational depart-ment patent innovation or scientist) (Geisler1995 Oliver et al 1999) Also there is aseries of perceptual measures that attempt todetermine the adequacy of funding (Atuahene-Gima 1995) Measures though tend princi-pally to be quantitative and express little otherthan funding level in particular few measuresattempt to determine the adequacy of fundingfor the innovation project Kerssens-vanDrongelen and de Weerd-Nederhof (1999)point to a lack of measurement proceduresto help managers diagnose poor innovationperformance or support improvement
A more helpful measure of inputs maytherefore be obtained by disaggregating inputsinto different types and measuring each inde-pendently before aggregating back to a meas-ure of overall inputs management Brown andSvenson (1988 30) define the inputs into theRampD system as lsquothe raw materials or stimulia system receives and processesrsquo includingpeople equipment facilities and funds Thisfundamental distinction between people toolsand physical and financial resources is widelymirrored in the literature
People factors have been measured as thenumber of people committed to the innovationtask (absolute numbers and relative to totalemployees) in terms of the mix of types ofpeople regarding cosmopolitanism and pro-pensity to innovate and in terms of skillsexperience and education Damanpour (1991)argues that a diversity of skills and experiencepermits more differentiated units from which
collaborative relationships can emerge and addsignificant value to innovation outcomesAlthough Baldridge and Burnham (1975) arguethat demographic characteristics (sex agecosmopolitanism education) do not appearto influence innovative behaviour amongindividuals more recent research suggests thatinnovating groups should comprise individualswith a mix of these characteristics (Amabile1998) Members with high levels of educationand self-esteem increase the effectiveness ofRampD project teams (Kessler and Chakrabarti1996) and individuals of greater educationalattainment with diverse backgrounds havebeen associated with more innovative teams(Bantel and Jackson 1989)
The propensity of an individual to innovatehas received considerable attention though itis difficult to measure Kirton (1976) devel-oped a 32-item questionnaire designed toestablish an individualrsquos position on anlsquoadaptorndashinnovatorrsquo continuum Scott andBruce (1994) operationalized an lsquoinnovativebehaviour measurersquo consisting of six itemsagainst which subordinates are measured byhierarchical superiors Finally the InnovationPotential Indicator (Patterson 2003) providesa framework for investigating individualbehaviours that might promote or inhibitinnovation in the workplace This measureis constructed around four dimensions anindividualrsquos motivation to change challeng-ing behaviour preferred approach to workand preference for tried and trustedmethods of work as opposed to doing thingsdifferently
Facilities or physical resources is a broadcategory that captures a range of inputs frombuildings to computer equipment Physicalresources can be counted or measured indollar terms However one important generalmeasure of facilities which cannot be so read-ily measured is slack Slack resources orunused capacity can be regarded as an import-ant catalyst for innovation Slack allowsfailures to be absorbed provides the opportu-nity for diversification and fosters a cultureof experimentation and protects against the
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Innovation management measurement A review
uncertainty of project failure (Kimberly 1981)An alternative view however suggests a nega-tive relationship slack can become synonymouswith waste and represents a cost that should beeliminated (Nohria and Gulati 1996) Typicallyfinancial measures of slack are used (Daman-pour 1991) although Miller and Friesen (1982)use both financial and human measures ofslack
Use of systems and tools is an importantinput to the innovation process (Bessant andFrancis 1997 Cooper et al 2004) Measuresidentified tend to relate to whether or not theorganization has or makes use of formal sys-tems and tools in support of innovation Thesecan be of various sorts such as the availabilityand use of tools and techniques for promotingcreativity (Amabile 1998 Rickards 1991Rochford 1991 Thompson 2003) or the avail-ability and use of systems of quality controlranging from informal methods to specifictechniques such as total quality management(TQM) (Souitaris 2002) While tool use canbe evaluated on a binary or degree of use scalethere is little other than Chiesa et alrsquos (1996)technical innovation audit that attempts tomeasure whether or not tool use is consistentwith a firmrsquos innovation requirements and isintegrated into its processes
We conclude that while there has been aconcentration on financial measurement ofinputs there is less emphasis on measuringother aspects of the category Even withinfinancial measures there are few that attemptto determine the adequacy of funding for theinnovation project Further most measuresreflect a preoccupation with RampD and NPDrather than other forms of innovation (egprocess business model) In particular thesofter inputs of skills and knowledge arepoorly represented by measurement instru-ments Tacit knowledge input appears not tobe well captured by extant measures and nomeasures of appropriate skill levels have beendeveloped This is an imbalance that needsto be addressed by further work to developa balanced set of measures covering allsub-dimensions of the input category
Knowledge Management
Knowledge absorption an organizationrsquosability to identify acquire and utilize externalknowledge can be critical to a firmrsquos success-ful operation (Zahra and George 2002) Theconcept of knowledge has received muchattention in recent years (eg Blackler 1995McAdam 1999 Nonaka 1991) and has beenasserted to play a critical role in the innova-tion process (Hull et al 2000) Knowledgemanagement is concerned with obtainingand communicating ideas and informationthat underlie innovation competencies andincludes idea generation absorptive capacityand networking Knowledge managementcovers the management of explicit andimplicit knowledge held by the organization(Davis 1998 Nonaka 1991) as well as theprocesses of gathering and using informa-tion The three areas within knowledgemanagement of importance for innovationmanagement identified in the literatureare idea generation knowledge repository(including the management of implicitand explicit knowledge) and informationflows (including information gathering andnetworking)
The importance of generating sufficientnumbers of ideas has been well established inthe literature Ideas are the raw materials forinnovation it is relatively inexpensive togenerate and screen ideas yet this can havesignificant impact on ultimate success orfailure (Cooper 1988) Several authors haveconceptualized the early stages of the innova-tion process as a somewhat fuzzy period(Kim and Wilemon 2002 Moenaert et al1995 Verworn 2002) including opportunityidentification opportunity analysis idea gen-esis idea selection and concept development(Koen et al 2001)
At the commencement of the innovationprocess when ideas are generated andexplored measures tend mostly to be quanti-tative inexpensive and rapid As the processprogresses and uncertainties with regard toappropriateness feasibility and business case
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are reduced measurement approaches becomeincreasingly qualitative and possibly morecostly and time-consuming to deploy Meas-ures imply an assumption that the objective isto generate as many ideas as possible throughthe use of generative tools Several measuresattempt to count the number of ideas gener-ated in a period (cf Chiesa et al 1996 Leeet al 1996) while others probe the extent towhich organizations are using different gener-ative tools and techniques (cf Cebon andNewton 1999 Chiesa et al 1996 Loch et al1996 Rochford 1991 Szakonyi 1994Thompson 2003)
If knowledge is fundamental to innovationthen it should be possible to measure theaccumulated knowledge of the firm itsknowledge repository One aspect of innova-tion relates to combinations of new andexisting knowledge which privileges the con-tribution of internal and external knowledgeand the mechanisms by which it flows intoand within an organization (Galunic andRodan 1998 Nonaka and Takeuchi 1995 Pittand Clarke 1999) Central to this perspectiveis the idea of lsquoabsorptive capacityrsquo the firmrsquosability to absorb and put to use new knowledgeand involving lsquoan ability to recognize thevalue of new external knowledge assimilateit and apply it to commercial endsrsquo (Cohenand Levinthal 1990 128) Absorptive capacityresults from a prolonged process of invest-ment and knowledge accumulation within thefirm and its development is path dependentFirms with strong absorptive capabilities aremore likely to acquire knowledge and learneffectively from outside Higher levels ofabsorptive capacity appear to be positivelyrelated to innovation and performance (Chen2004 Tsai 2001) but it is impossible topredict what is the lsquorightrsquo level of investmentin absorptive capacity for any individualfirm (Cohen and Levinthal 1990) meaningthat it is not readily amenable to interna-tional benchmarking However the conceptualdevelopment and empirical studies infer orimply a range of organizational knowledgestates
Several quantitative approaches have beendeveloped for the measurement of importedtangible knowledge The most frequently usedapproach counts numbers or value of patentsbrought in However this restricts its applica-tion to contexts in which patents are signifi-cant and overlooks those industries wherethey do not feature For a while patent datawas widely accepted as a proxy measure forinnovation More recently however the valid-ity of patent statistics has been questionedpatents vary in their utility for organizationsand so their input value to the innovation can-not adequately be judged in terms of a cashprice (Griliches 1990 Pakes and Griliches1980) Only a few studies have attempted todevise measures for other contexts For exam-ple Kleinknecht (1987) constructed a ques-tion designed to capture the informal hours ofRampD work that are hypothesized to be hiddenwithin other activities or to take place outsideformal working hours
Patents represent codified knowledge butthe importance of tacit knowledge to organi-zational innovation is underscored in theresource-based approach (Barney 1991 Galu-nic and Rodan 1998 Grant 1991 Leonardand Sensiper 1998) Tacit knowledge is animportant resource when it is has value for theorganization is difficult for competitors toimitate is rare and can be operationalized bythe organization Of particular importance isits acquisition and use (Bess 1998) It can beacquired opportunistically or by a deliberatepolicy of search
Tacit knowledge is notoriously difficult tomeasure in organizational research andmethodologies for its investigation andmeasurement can be complex Ambrosiniand Bowman (2001) for example proposean approach that consists of causal mappingfacilitated by story-telling and the use of meta-phor Other attempts to capture tacit know-ledge and group memory have been reportedby Oliver et al (1999) At the level of theorganization Sveiby (1997) suggests thedifference between market value and netbook value as an indicator of the value to an
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Innovation management measurement A review
organization of intangible knowledge assetsThe first method is resource intensive whilein the second it is not clear how much of theidentified value can be attributed to inputs intoinnovation Tacit knowledge input appears notto be well captured by extant measures
Information flows into and within the firmare important in sparking ideas and in allow-ing the development of innovative conceptsThree measurement approaches to informa-tion flows can be identified first measures ofthe linkages that the innovating group main-tains with external organizations and sourcessecond measures of internal informationgathering processes Third measures of cus-tomer information contacts
Linkage measures determine whether or notthe organization has and maintains externallinkages with other organizations or sourcesof information eg through participation inresearch projects university links or attend-ance at trade shows (Atuahene-Gima 1995Tipping and Zeffren 1995) These are princi-pally dichotomous measures only infre-quently is there a measure that implies somesort of qualitative assessment of the nature ofthe linkages Cebon and Newtonrsquos (1999)measures suggest that quality and diversity oflinkage might be an important factor forexample visits to exemplary projects
Statistics on the use of formal methods ofinformation gathering such as project reviewsand the use of technical reports (Oliver et al1999) provide a frequently used approach tothe measurement of information gatheringCebon and Newton (1999) suggest bench-marking information gathering against com-petitorsrsquo activities to gauge how well theactivity is performed Another important areaabout which a firm needs understanding andinformation is customers Atuahene-Gima(1995) lists a series of measures specificallyaimed at examining the extent to which organ-izations make use of customers as a source ofinformation and include measures assessingthe adequacy of information and customercontact time (Lee et al 1996 Miller andFriesen 1982)
Innovation Strategy
Ramanujam and Mensch (1985) defineinnovation strategy as a timed sequence ofinternally consistent and conditional resourceallocation decisions that are designed to fulfilan organizationrsquos objectives Activities mustbe consistent with an overarching organiza-tional strategy that implies that managementmust take conscious decisions regardinginnovation goals (Sundbo 1997) Innovationstrategy is generally understood to describe anorganizationrsquos innovation posture with regardto its competitive environment in terms of itsnew product and market development plans(Dyer and Song 1998) This techno-centricview predominates in the literature andoverlooks those innovative initiatives that areinternally focused (for example the adoptionof new management techniques and prac-tices) In the conceptualization of innovationstrategy as an articulation of the organizationrsquoscommitment to the development of productsthat are new to itself andor to its marketsand because strategy does not operate in avacuum but requires a structural context twocomplementary approaches to its measure-ment which have been described as objectiveand subjective (Li and Atuahene-Gima 2001)can be identified
In the literature scholars principally haveadapted measures from strategic managementresearch to explore the existence nature andextent of innovation strategy Richard et al(2003) use three scale items drawn from thestrategic posture scale devised by Covin andSlevin (1989) who in turn draw on Milesand Snowrsquos (1978) lsquoprospectorsrsquo and Mintz-bergrsquos (1978) lsquoentrepreneurialrsquo organizationsfor their assessment of bank innovativenessThese studies classify organizations based ontheir approach to innovation using classifica-tions that are ontologically grounded in theassumption that innovation orientation can bedeciphered from quantitative interpretationsof new product and market activity
Other objective evidence of an organizationrsquosinnovation strategic posture may include many
copy Blackwell Publishing Ltd 2006 31
March 2006
of the input measures (such as level of RampDexpenditure) that we have already discussedIt is argued that it is not their absolute magni-tude but their magnitude relative to industryrivals that is significant As has been notedalthough these may be useful indicators ofcommitment or intent they could mask pro-cess inefficiencies However OrsquoBrienrsquos (2003)observation that an interaction betweenintended strategy and slack will influence per-formance suggests that process inefficienciesare less likely to occur where an innovationstrategy is not merely nominally adopted butis embedded in the culture behaviours andactions of the organization
In Li and Atuahene-Gimarsquos (2001) termsthe evidence for an embedded innovationstrategy is subjective and may include evalua-tions of an organizationrsquos emphasis on NPDsuch as resource allocation Saleh and Wang(1993) describe this as consisting of threemain components risk-taking proactivenessand persistent commitment to innovationThese include top management responsibilityfor innovation within the organization includ-ing specifying and communicating a directionfor innovation Cooper (1984) demonstratedthat new product performance is largelydecided by the strategy that top managementadopts The key components are the linkbetween innovation strategy and overall busi-ness goals (strategic orientation) and theprovision of leadership to make innovationhappen via a strong vision (Pinto and Prescott1988) for innovation a long-term commit-ment to innovation and a clear allocation ofresources (Cooper et al 2004) This distinc-tion between strategic planning or orientationand strategic vision or leadership is frequentlyreplicated in the literature
Two distinct types of strategic orientationmeasures can be identified in the literatureFirst those that measure whether the organi-zation has an innovation strategy this can beevaluated in several ways such as commit-ment to differentiated funding (White 2002)explicit expression (does the organizationhave an innovation strategy) (Miller and
Friesen 1982) and identifiable roles for newproducts and services (Cooper and Klein-schmidt 1990 Geisler 1995 Hauser andZettelmeyer 1997 Tipping and Zeffren 1995)The second type of measure regards strategyas a dynamic instrument that shapes andguides innovation in the organization Thesemeasures assume that strategy exists and asksquestions about how effective it is in shapingand guiding lsquoare structures and systemsalignedrsquo (Bessant 2003) lsquodo innovation goalsmatch strategic objectivesrsquo (Tipping andZeffren 1995) and further similar measures ofstrategic fit (Bessant 2003)
From a strategic leadership perspectiveDougherty and Cohen (1995) found thebehaviour of senior managers to be influentialThose chief executives most likely to makeinnovation happen are those with a clearvision of the future operation and direction oforganizational change and creativity (Shin andMcClomb 1998) Senior management areresponsible for developing and communicat-ing a vision for innovation being supportiveand adopting an attitude tolerant to changeand championing the notion of innovationwithin the organization Managerial toleranceto change creates the right climate for theimplementation stage of innovation whereconflict resolution might be necessary(Damanpour 1991)
Managerial attitude is also reflected innorms or support for innovation These are theexpectation approval and practical support ofattempts to introduce new and improved waysof doing things in the work environmentMeasures are mostly qualitative in nature andexplore perceptions mostly about the extentto which respondents recognize factors to bepresent (or absent)
Relatively few measures of championingand leadership have been uncovered in thisreview other than those that simply ask thequestion whether or not one or other existsperhaps through evidence of signs of commit-ment in annual reports (Chiesa et al 1996) orlevels of concern of top management (Coughlanet al 1994) or whether or not an individual
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Innovation management measurement A review
has been physically assigned to a particularrole (Souitaris 2002) Shane et al (1995) pro-vide a series of reflective questions designedto allow organizations to determine for them-selves their expectations and understandingof the role of champion For example lsquoto whatextent should the organization make it possiblefor the people working on an innovation tobend the rules of the organization to developthe innovation or be allowed to bypass certainpersonnel procedures to get people committedto an innovationrsquo
It must be emphasized that the dominantperspective on strategy in the literature isone that examines the relationship betweenstrategy and performance However a smallnumber of studies have examined the natureof the transitions of these states as organiza-tions adopt and embed an innovation strategyThis sub-section of the literature is under-pinned by the assumption that firms that fol-low innovation strategies differ from otherfirms in several respects It is apparent thatmore innovative firms adopt different opera-tional strategies to accommodate flexibilityand quality capabilities (Alegre-Vidal et al2004) have different capital managementpractices to facilitate slack resources (OrsquoBrien2003) are more tolerant of internal conflict insupport of creativity (Dyer and Song 1998)and maintain organizational structures that arein the lsquointermediate zone between order anddisorderrsquo (Brown and Eisenhardt 1997 22)What is clear from this literature is that anytransition towards an innovation strategy willnecessarily take several years because of theresources and energy that are necessary beforesuch a transformation can even be triggered(Hope Hailey 2001)
Organizational Culture and Structure
Burns and Stalker (1961) described a contin-gency approach to innovation managementlater developed to include concepts of func-tional differentiation specialization and inte-gration (Lawrence and Lorsch 1967) whichsuggests that environmental change prompts a
realignment of the fit between strategy andstructure That is to perform effectively anorganization must be appropriately differenti-ated specialized and integrated Pugh et al(1969) argued that the structure of an organi-zation is strongly related to the context withinwhich it functions Our closing discussion inthe previous section that the characteristics oforganizations following an innovation-focusedstrategy will differ from those that do not isconsistent with this contingency approach andin the following we focus on those dimen-sions of culture and structure that have beenidentified to differentiate between innovativeand non-innovative organizations
Organizational culture and structure concernthe way staff are grouped and the organiza-tional culture within which they work Therehas been considerable work on the situationaland psychological factors supportive of inno-vation in organizations Indeed it has beenwidely demonstrated that the perceived workenvironment (comprising both structural andcultural elements) does make a difference tothe level of innovation in organizations (Ama-bile et al 1996 Ekvall 1996) Creative andinnovative behaviours appear to be promotedby work environment factors (Mathisen andEinarsen 2004) Indeed it is clear that organ-izations can create environments in whichinnovation can be encouraged or hampered(Dougherty and Cohen 1995 Tidd et al1997) A common theme is that of the poly-chronic organization ndash one with the capacityto be in two states at once (Becker andWhisler 1973) Shepard (1967) describes thisas a two-state organization manoeuvreingbetween loose and tight and Mitroff (1987)as business-as-usual versus business-not-as-usual More prosaically this means organiza-tions need to be able for example to providesufficient freedom to allow for the explorationof creative possibilities but sufficient controlto manage innovation in an effective and effi-cient fashion
Ernst (2002) specifies a range of genericcharacteristics for the dedicated project groupassigned the innovation task multidisciplinarity
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March 2006
dedicated project leader inter-functional com-munication and co-operation qualificationsand know-how of the project leader teamautonomy and responsibility for the processAnd these factors are echoed throughout theliterature Rothwell (1992) refers to them aslsquocorporate conditionsrsquo Chiesa et al (1996)lsquoenabling processesrsquo and OrsquoReilly and Tushman(1997) lsquonorms for innovation and changersquoHowever despite their perceived importancethere is little guidance on how to measurethem
Volberda (1996) developed a conceptualmodel of alternative flexible organizationalforms that are argued to initiate or respondbetter to different types of competition Yet inspite of its importance there is relatively littleevidence of extant measures of flexibility inthe literature Rothwell (1992) and Ekvall(1996) propose a range of foci for measures oforganizational and production flexibility suchas lsquocorporate flexibility and responsiveness tochangersquo Coughlan (1994) considers the flexi-bility of resource allocation Several measuresof personnel flexibility are evident such aslsquothe adaptiveness of RampD personnel to tech-nology changesrsquo (Lee et al 1996) and lsquothewillingness to try new procedures and toexperiment with change so as to improve asituation or a processrsquo (Abbey and Dickson1983) At the level of the firm Liao et al(2003) introduce a similar construct ndash lsquoorgan-izational responsivenessrsquo
Organizational complexity the amount ofspecialization and task differentiation report-edly have a positive relationship (Damanpour1996) though Wolfe (1994) argues that it mayfavour initiation at the expense of implemen-tation Administrative intensity that is theratio of managers to total employees favoursadministrative innovation (Damanpour 19911996) but possibly at the cost of other pro-duct or technological innovations (Doughertyand Hardy 1996) Centralization the concen-tration of decision-making authority at the topof the organizational hierarchy and formaliza-tion the degree of emphasis on following rulesand procedures in role performance have both
been shown to have a negative impact on organ-izational innovation (Burns and Stalker 1961Damanpour 1991) Indeed rigidity in rulesand procedures may prohibit organizationaldecision-makers from seeking new sources ofinformation (Vyakarnam and Adams 2001)
Underlying the concept of the workplaceenvironment are issues related to the manage-ment of human resources and the creation ofa culture or climate in which individuals per-ceive innovation to be a desired and supportedorganizational objective There has been con-siderable empirical work on organizationalclimates supportive of the innovation processand several measurement instruments havebeen developed which Mathisen and Einarsen(2004) review The Team Climate Inventory(TCI) (Anderson and West 1996 1998) andthe KEYS instrument for assessing the workenvironment for creativity (Amabile et al 1996)have been found to be robust and rigorous
The TCI has been applied and validated inseveral studies (Agrell and Gustafson 1994Anderson and West 1998 Kivimaumlki et al1997 West and Anderson 1996) Replicationstudies using the TCI have found it canexplain a large part of the variance in teamsrsquoinnovative performance (Agrell and Gustafson1994) The TCI is based around four mainfactors participative safety (how participativeis the team in decision-making proceduresand how psychologically secure do teammembers feel about proposing new andimproved ways of doing things) support forinnovation (the degree of practical support forinnovation attempts contrasted with the rheto-ric of professed support by senior manage-ment) vision (how clearly defined sharedattainable and valued are the teamrsquos objectivesand vision) and task orientation (the com-mitment of the team to achieve the highestpossible standards of task performance includ-ing the use of constructive progress monitor-ing procedures) (Anderson and West 1996)Kivimaumlki et al (1997) suggested a fifth factorlsquointeraction frequencyrsquo relating to the regularityof contact and communication within theproject team
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There is general agreement about theimportance of individual and group autonomyin the innovation process (Amabile 1998)Zien and Buckler (1997) emphasize the needfor freedom to experiment and the creation ofsafe havens without which innovation out-come might be constrained Measures ofautonomy mix both qualitative and quantita-tive approaches For example lsquothe degree offreedom personnel have in day-to-day operat-ing decisions such as when to work andhow to solve job problems including freedomfrom constant evaluation and close supervi-sionrsquo (Abbey and Dickson 1983) or lsquopercent-age of RampD portfolio with explicit businessunit andor corporate business managementsign-offrsquo (Tipping and Zeffren 1995) Addition-ally several authors have proposed generalmeasures of autonomy such as lsquofreedom tomake operating decisionsrsquo (Abbey and Dick-son 1983) or lsquodegree of empowermentrsquo (deLeede et al 1999 Tipping and Zeffren1995)
Morale and motivation are dimensions ofthe innovative organization that can be meas-ured as they pertain to individuals ndash lsquotheextent to which personnel are well rewardedrsquo(Abbey and Dickson 1983) to groups ndash lsquoourreward system is more group-based thanindividual-basedrsquo (Parthasarthy and Hammond2002) and to the organization as a whole ndashlsquothe degree to which the organization attemptsto excelrsquo (Abbey and Dickson 1983) Aspectsof morale and motivation that have beenmeasured include trust (Miller and Friesen1982) and job satisfaction which has beenmeasured by Keller (1986) on a 20-item scale
Organizational culture may include a sharedvision and it has been argued that the clearerthe vision the more effective it is as a facilitatorof innovation as it enables focused develop-ment of new ideas that can be assessed moreprecisely (West 1990) Pinto and Prescott(1988) found that the only factor to have pre-dictive power in terms of potential for successat all stages of the innovation process (con-ception planning execution and termination)was having a clearly stated missionvision
while West (1990) contends that the quality ofinnovation is partly a function of visionKeller (1986) adopts Kirtonrsquos (1976) 32-itemadopterndashinnovator inventory to determineindividual and team orientation to innovationVision is operationalized in the team climateinventory (cf Agrell and Gustafson 1994Anderson and West 1996 1998 West andAnderson 1996) and is deconstructed into aseries of sub-dimensions such as clarity shared-ness attainability and value with regard toteam objectives
Another aspect of culture is the propensityto take risks Saleh and Wang (1993) describethis as a willingness to confront risky oppor-tunities and tolerate failure and learn fromdoing so rather than recklessly gamblingSimilarly West (1990) demonstrated thathigher levels of participative safety facilitateinnovation Participative safety is non-judgmental supportive and characterized bysocio-emotional cohesiveness The attractive-ness of the organization as a place to workand undertake innovative activities is used byGeisler (1995) as an indicator of the climatefor innovation measured by numbers of can-didates applying for positions and the ageprofile of scientists and engineers Keller(1986) offers a slightly different perspectiveon participative safety with the constructlsquogroup cohesivenessrsquo which he operational-izes using an established five-item measure
This review has described a wide variety ofmeasures proposed for organizational cultureand structure Unlike some other aspects ofinnovation management this area has receivedextensive measurement attention HoweverHolbek (1988) argues that innovating organi-zations must adopt contrasting structures andclimates as they move from the initiation tothe implementation stages of innovationChesborough and Teece (1996) and Burns andStalker (1961) argue that there is a relation-ship between organizational design and typeof innovation It is a significant gap in innova-tion measurement that there appears to be nomeasures that adequately capture or articulatethis sense of structural shift
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Portfolio Management
The importance of portfolio management tosuccessful product innovation has recentlyemerged as a key theme in the literature Itis important because of the rapidity at whichresources are consumed in the innovationprocess and the need for these to be managed(Cebon and Newton 1999) The effectivenesswith which an organization manages its RampDportfolio is often a key determinant of itscompetitive advantage (Bard et al 1988) Thefocus of portfolio management is on makingstrategic technological and resource choicesthat govern project selection and the futureshape of the organization (Cooper et al 1999)The problems of allocation of resources evalu-ation selection and termination of projects inachieving the optimal portfolio have beenextensively investigated The models all havethe objective of devising means to allocateresources to projects to obtain the optimalbalance in the product development portfoliothat is arriving at a portfolio that optimizesthe trade-off between returns and risks
The process of selecting innovation projectsrequires evaluation and resource allocationunder uncertain conditions It is argued that asystematic process guided by clear selectioncriteria can help optimize the use of limitedresources and enhance an organizationrsquoscompetitive position (Hall and Nauda 1990)The earliest models used return on investmentas the primary decision criteria (Bard et al 1988)Following this increasingly sophisticatedmathematical tools were developed to resolvewhat Schmidt and Freeland (1992) describe asthe constrained optimization problem that isto maximize the output (according to specifiedcriteria) from a subset of available inputsThese project selection models lsquohave beenvirtually ignored by industryrsquo (Schmidt andFreeland 1992 190) Part of the reason forthis is the inherent complexity of some ofthese models but also that they fail to takeinto account organizational decision andcommunication processes More recentlymodels have tried to take account of these
more qualitative factors involved in decisionprocesses
Scoring models require respondents tospecify the merit of any project proposalaccording to a set of a priori criteria whichmay be objective or subjective (Hall andNauda 1990) Economic and benefit modelsattempt to compute the cost benefit or finan-cial risk of pursuing a specific project whilemathematical programming approaches seekto optimize some objective function(s) subjectto specified resource constraints Algorithmsof varying complexity exist requiring moni-toring and significant data entry and whilemany are conceptually attractive surveys donot show widespread utilization of thesetechniques (Hall and Nauda 1990) Theseapproaches are all based on financial meas-ures such as internal rate of return net presentvalue and return on investment At the otherend of the spectrum qualitative approachessuch as peer review and mental checklistsrely on subjective perceptions and measuresof portfolio balance (Cooper et al 2001Henriksen and Traynor 1999)
Cooper et al (1999) find that best performersuse explicit formalized tools and consist-ently apply them to all projects considered tobelong to a portfolio A series of measures canbe identified that evaluate the whole portfolioof innovation projects to answer questionssuch as lsquois it balanced in terms of quantity ofshort- and long term-projectsrsquo and lsquois there abalance between high and low risk projectsand large and small projectsrsquo (Brenner 1994Cooper et al 2001) Another set seeks to iden-tify the extent to which portfolio evaluationmeasures are formalized within the organiza-tionrsquos processes (Cebon and Newton 1999Chiesa et al 1996 Farrukh et al 2000 Millerand Friesen 1982) Yet another approach is toview project evaluation and selection as anorganizational capability and attempt to deter-mine a level of proficiency (Szakonyi 1994)Finally there is a series of post hoc measuresof the appropriateness of project selections inthe light of results and alignment with busi-ness objectives (Lee et al 1996)
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Project Management
Project management is concerned with theprocesses that turn the inputs into a marketa-ble innovation The innovation process iscomplex comprising a myriad of events andactivities some of which can be identified as asequence and some of which occur concur-rently and it is clearly possible that innova-tion processes will differ to some degreeacross organizations and even within organi-zations on a project-by-project basis Havingan efficient process that is able to manage theambiguity of the innovation is universally agreedto be critical to innovation (Globe et al 1973)
Various approaches have been taken tomodelling innovation processes as a series ofevents (Zaltman et al 1973) as a social interac-tion (Voss et al 1999) as a series of transactions(Nelson and Winter 1982) and as a process ofcommunication (Farrukh et al 2000) The his-tory of project management research is partlycharacterized by a debate regarding the extentto which events and activities within the processoccur in linearly sequential discrete identifiablestages (Zaltman et al 1973) or whether eventsare more disorganized (King 1992) or evenchaotic (Koput 1997) However despite thesedifferent viewpoints there are a number ofcommon elements that can be summarized asthe major components of the innovation projectmanagement These are project efficiencytools communications and collaboration
Several studies make efforts to measureproject management efficiency mostly in theform of comparisons between budget and actual(project costs project duration revenue fore-casting) Another measure of project manage-ment success is speed Innovation speed hasbeen positively correlated with product qual-ity or the degree to which it satisfies customerrequirements measures include speed (Hauserand Zettelmeyer 1997) performance againstschedule (Chiesa and Masella 1994) and dura-tion of the process (Cebon and Newton 1999)
To achieve efficiency it is widely recom-mended that organizations seeking to innovateshould establish formal processes for innovat-
ing and make use of tools and techniquesthat may facilitate innovative endeavours Thestage-gate process (Cooper 1990) is possiblythe most familiar of these but other method-ologies for innovation project managementexist including Phased Development Productand Cycle-time Excellence and Total Design(see Jenkins et al (1997) for a discussion)These methodologies have in common theseparation of the product development processinto structured and discrete stages which eachhave milestones in the form of quality controlcheckpoints at which stopgo decisions are madewith regard to the progress of the project Thesehighly structured approaches to the manage-ment of the innovation process began toemerge in the 1990s (Veryzer 1998) The useof structured tools and processes can bemeasured by project process evaluations forexample the use of a formal problem-findingproblem-solving cycle (Bessant 2003) the useof formal post-launch evaluation procedures(Atuahene-Gima 1995) or the use of certifiedprocesses (Chiesa et al 1996) These rathergeneral process measures have been supple-mented by measures of the use of specificinstruments and tools such as interactiveCAD or CAM (Maylor 2001) or the use ofcomputer-integrated manufacturing processes(Parthasarthy and Hammond 2002) but wenote that these measures betray the technologicaland NPD heritage that underpins many of theinnovation measures identified in this reviewEquivalents for service industry public ornot-for-profit sector innovations are somewhatlacking in the literature and constitute aresearch gap
Communications are important in projectmanagement Damanpour (1991) demon-strated the existence of a positive relationshipbetween internal communication and innova-tion Internal communication facilitates thedispersion of ideas within an organizationincreases the diversity and also contributes tothe team lsquoclimatersquo Communication can bemeasured by various integration mechanismseg committees numbers of meetings andcontacts (Damanpour 1991) There are also
copy Blackwell Publishing Ltd 2006 37
March 2006
measures of external communications whichtend to focus on whether communication istaking place the level at which it occurs andwith whom (Cebon and Newton 1999 Leeet al 1996 Rothwell 1992 Souitaris 2002)These measures of internal and external com-munication in the literature are based on bothsubjective evaluations and objective frequencycounts Subjective measures include lsquowe alwaysconsult supplierscustomers on new productideasrsquo (Parthasarthy and Hammond 2002) andlsquodegree of organization members involved andparticipating in extra-organizational professionalactivitiesrsquo (Damanpour 1991) Objective countsinclude (Damanpour 1991) lsquoextent of commu-nication amongst organizational units or groupsmeasured by various integrating mechanismssuch as numbers of committees and frequencyof meetingsrsquo (Anderson and West 1998)lsquofrequency of formal meetings concerningnew ideasrsquo (Souitaris 2002 Szakonyi 1994)lsquohow well do the technical and finance peoplecommunicate with one anotherrsquo
It is widely recognized that collaboratingwith suppliers (Bessant 2003) and customers(von Hippel 1986) can also make a significantcontribution to the innovation processMeasures of collaborative working includethe use of guest engineers (Maylor 2001) thepercentage of projects in co-operation withthird parties (Kerssens-van Drongelen andBilderbeek 1999) and the extent to whichdecision-making at top levels is characterizedby cross-functional discussions (Miller andFriesen 1982) In addition Jassawalla andSashittal (1999) identify some characteristicsof internal collaboration ie that teams arecharacterized by their mindfulness levels ofat-stakeness synergy and transparency butthey do not suggest how these aspects mightbe measured which constitutes a furtherresearch gap
Commercialization
Commercialization can be considered to bethe second of the two phases in Zaltman et alrsquos(1973) conceptualization of the innovation
process that is lsquoimplementationrsquo This canmean taking an innovation to market (Chakra-vorti 2004) but may also include convincingproduction managers to adopt a series of newtechniques available to them (Single andSpurgeon 1996) Indeed the successful intro-duction of new products and services intomarkets is important for the survival andgrowth of organizations Kelm et al (1995)regard commercialization as a transitionalphase in which the organization becomesless reliant on its technological capabilities(important during the activities of initiation)but more dependent on market dynamicsCommercialization is concerned with makingthe innovative process or product a commer-cial success it includes issues such as market-ing sales distribution and joint venturesWhile technical capabilities are important forthe early stages of the innovation process anddevelopment activities for the launch andimplementation stage it is marketing capabili-ties (market investigation market testingpromotion etc) that are significant (Calantoneand di Benedetto 1988 Globe et al 1973)Verhaeghe and Kfir (2002) consider aspectsof commercialization under the headings ofmarket analysis and monitoring reaching thecustomer and market planning
Firm-level measures of the launch or com-mercialization process appear to be relativelythin In their description of the RampD processBalachandra and Brockhoff (1995) character-ize the commercialization stage as requiringlsquobig bucksrsquo market reviews and organiza-tional commitment Most measures appear tobe not much more sophisticated than thisMeasures are frequently restricted to numbersof products launched in a given period (egYoon and Lilien 1985) There is thoughsome focus on market analysis and monitor-ing (Verhaeghe and Kfir 2002) Song andParry (1996) employ a set of measures oflaunch proficiency (salesforce distributionaland promotional support) that directly addressthe lsquoadequacyrsquo of the organizationrsquos facilities inthese areas as do Avlonitis et al (2001) Andthere is a limited mention of the commercial
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Innovation management measurement A review
intentions of an organizationrsquos competitors(Calantone and di Benedetto 1988) Thethemes of proficiency of personnel in this area(eg Atuahene-Gima 1995 Cebon and New-ton 1999) of adherence to a commercializa-tion schedule (eg Griffin and Page 1993) andof formal post-launch reviews (Atuahene-Gima 1995 von Zedtwitz 2002) can also befound in the literature
Even in the work that addresses post-project reviews very little attention is directedtowards measuring innovation launch orcommercialization However this comes aslittle surprise as Hultink et al (2000) recentlyobserved that little work has been done in thearea perhaps because at least in the innova-tion literature launch activities appear to beconsidered the domain of other specialistsparticularly marketers and the process is seenas separate from innovation In their studythey investigated launch decisions associatedwith success for consumer and business-to-business products Much of the literature thatconsiders launch and commercialization doesso from the viewpoint of the adopter andassesses rates of adoption and diffusion ofinnovations over time across populations(Kessler and Chakrabarti 1996 Van DenBulte 2000)
The area of commercialization appears tobe the least developed of the issues involvedin innovation management This is a huge gapbecause without this last step the previoussteps of assembling inputs project manage-ment etc will not result in a commerciallyviable outcome for the firm We believe thatthis area of innovation is in urgent need offurther development from both theory andmeasurement viewpoints
Discussion
Innovation management measurement is acritical discipline for both academics andpractitioners The capacity of organizations toinnovate is determined by multiple factors thatrelate both to their own internal organizationand to their market environment (Rothwell
et al 1974) and the task of generating andthen converting ideas into usable and market-able products requires high levels of inter-functional co-ordination and integration Thispaper opened with the general observationthat innovation measurement does not appearto take place routinely within managementpractice and that where it does it tends tofocus on output measures Further from therelatively small number of empirical studiesof measurement in practice measurement ofinnovation management appears to be under-taken infrequently in an ad hoc fashion andrelies on dated unbalanced or under-specifiedmodels of the innovation management phe-nomenon This suggests that a large part ofthe contemporary conceptualization of theinnovation management phenomenon is over-looked in practitionersrsquo measurement prac-tices and consequently that opportunities forthe more efficient and effective managementof the innovation process are not realizedSome possible reasons for this state of affairsare failure of academics to communicate ade-quately inconsistency inaccessibility andcomplexity of measures and poor synthesisand packaging
Following a review and synthesis of theliterature we proposed a seven-dimensionalconceptualization of the innovation manage-ment phenomenon and applied it to an exam-ination of the measurement problem Throughthe application of this framework to their ownparticular context it is suggested that practi-tioners will be able to conduct an evaluationof their own innovation management activityidentify gaps weaknesses or deficiencies andalso improvement potential Further it ishoped that organizations applying the frame-work will be able to tease out areas whereinnovation is only nominally adopted in theirprocesses and identify areas where attentionand resources might be focused
From the perspective of its management itis no longer sufficient to treat innovation as alinear process where resources are channelledat one end from which emerges a new prod-uct or process The measurement framework
copy Blackwell Publishing Ltd 2006 39
March 2006
presented in Table 2 shows the breadth andvariety of elements of innovation managementthat ideally need to be measured There havebeen several studies that have investigated thelimitations of various approaches to measure-ment (eg Werner and Souder 1997) and ofspecific measures (eg Trajtenberg 1990) asthey relate to the practice of innovation Thechoice of an appropriate RampD measurementmetric depends on the userrsquos needs in terms ofcomprehensiveness of measurement type ofRampD being measured available data andamount of effort the user can afford to allocateto the exercise Nonetheless the commonciting across various papers of the measuresnoted in the innovation management frame-work presented here suggests that a base setof innovation management measures isimplicitly present in the literature eventhough they may be fragmented in appearanceand presentation By pulling together theinnovation management framework fromdiverse sources this paper aims to bring suchissues into the open and identify relevantresearch gaps Table 2 can be viewed as thebasis for a balanced scorecard (Kaplan andNorton 1992) for innovation managementthat is as a balanced set of areas that need tobe measured in order to gain insight into anorganizationrsquos holistic ability to manage inno-vation Such multidimensional approaches tomeasurement have been found in other areasof management to be an improvement on sim-ple one-dimensional measures and to be ableto capture both short- and long-term aspectsof value creation in the firm (Phelps 2004)
We have identified a large number of meas-ures and approaches in a variety of innovationmanagement areas and we have constructed ageneric set of innovation management meas-urement areas to act as a framework for bal-anced measurement However in several ofthese areas measurement gaps have beenidentified These gaps are of two types valid-ity gaps and omission gaps Validity gaps arisewhere there is insufficient evidence that pro-posed measures actually do capture drivers oroutputs of innovation management for example
we have noted the objections to counts ofpatents or increasing expenditure on RampD beingused as measures of innovative organizationsSimilarly there is an absence of evidence thatthe large number of subjective perceptions ofinnovation management practices proposed(lsquowe do Arsquo lsquowe are good at Brsquo) actually relateto innovation management performance
Omission gaps occur where the importanceof an aspect of innovation management is sup-ported in the literature but measures for thisaspect are lacking Omission gaps are particu-larly prevalent in the elements of innovationmanagement such as knowledge managementinnovation strategy and commercializationthat do not feature strongly in the literature ontechnological and manufacturing-based inno-vation Another area traditionally not givenmuch emphasis in this literature is organiza-tion and culture which fortunately is bettertreated by the organizational behaviour litera-ture where a number of measures have beendeveloped Much of the current state of meas-urement practice can be traced back to the dis-ciplinersquos early manufacturing RampD and NPDfocus While product innovation is undoubt-edly important it is only one dimension of anorganizationrsquos innovation agenda Process andorganizational innovations are recognizedtoo as critical for competitiveness yet theseperspectives are inadequately represented inmeasurement terms
General areas of omission in this fieldrelate to an over-reliance on financial meas-ures rather than process measures for exam-ple the use of financial measures of portfoliooptimization but an absence of portfoliocapability measures a similar reliance oncodified knowledge such as patents to theexclusion of more intangible measures suchas tacit knowledge the measurement of levelsof resources or activities with no indication ofwhat an optimal level would be the measure-ment of drivers of innovation without meas-ures of whether these drivers are aligned witheach other and with firm strategy measures ofpresence that do not measure quality (eg theuse of dichotomous (yesno) measures that do
40 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
not indicate how well an action is implementedand measures of the presence of leadership(such as champions) but not of quality ofleadership) a general absence of measuresfor important properties of organizationalstructures such as flexibility and a lack ofmeasures of the match between structure andenvironment a technological and NPD bias toproject management measures and a relativeabsence of measures for service sectors apaucity of measures for internal communica-tions and a general lack of measures forcommercialization management ndash in particulararound marketing and sales capabilities forinnovative products and services All thesegaps provide the potential for further researchin innovation management measurement
The absence of an accepted framework ofinnovation management measures leads notonly to the gaps identified above but also toother problems in the literature One is that itis frequently unclear whether or not the met-rics used are of the researchersrsquo own devisingdrawn from the literature or are what are usedby the organizations being studied Nor is italways clear when metrics are devised orrecommended whether they are intended foruse in a research capacity or for managementtasks Further the measures proposed in theliterature often seem to be proposed abstractlywith little consideration given to the use ofmeasures as a management tool in the day-to-day context of managing innovation In theabsence of a comprehensive framework forinnovation management measurement organ-izations will inevitably resort to ad hoc andpartial metrics which can encourage wastefulpractice (eg measuring innovation managementcapability according to annual RampD spend)We hope that the framework constructed inthis paper will be useful in the constructionof comprehensive measures of innovationmanagement
Acknowledgements
The research reported here was supported bya grant from Cranfield School of Management
the authors gratefully acknowledge this supportFurther the authors are grateful to the editorsand two anonymous reviewers for their helpfuland insightful comments on previous versionsof this paper
Note
1 Corresponding author Telephone +44 (0) 207594 9137 e-mail radamsimperialacuk
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Vyakarnam S and Adams RJ (2001) Institutionalbarriers to enterprise support an empirical studyEnvironment and Planning C Government andPolicy 19 335ndash353
Werner BM and Souder WE (1997) MeasuringRampD performance ndash state of the art Research-Technology Management 40 34ndash42
West MA (1990) The social psychology of innova-tion in groups In West MA and Farr JL (eds)Innovation and Creativity at Work Psychologicaland Organizational Strategies Chichester UKJohn Wiley pp 309ndash333
West MA and Anderson NR (1996) Innovation intop management teams Journal of Applied Psychol-ogy 81 680ndash693
White A (2002) Enabling factors in the front end ofthe innovation process In Proceedings 9thInternational Product Development ManagementConference Sophia Antipolis France BrusselsEuropean Institute for Advanced Studies inManagement pp 879ndash887
Wolfe RA (1994) Organizational innovationreview critique and suggested research direc-tions Journal of Management Studies 31 405ndash431
Yoon E and Lilien GL (1985) A new productlaunch-time decision model Journal of ProductInnovation Management 3 134ndash144
Zahra SA and George G (2002) Absorptivecapacity a review reconceptualization and
copy Blackwell Publishing Ltd 2006 47
March 2006
extension Academy of Management Review 27185
Zaltman G Duncan R and Holbek J (1973) Inno-vations and Organizations New York John Wiley
Zien KA and Buckler SA (1997) From experiencedreams to market crafting a culture of innovationJournal of Product Innovation Management 14274ndash287
Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
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Innovation management measurement A review
saturated nothing remains but to go on to newgroups for data on other categories and attempt tosaturate these categories also (Glaser and Strauss1967 65)
That is the incremental contribution of furthersampling is marginal and fails to add significantvalue The steps of our review are presented inTable 1
A plethora of studies operationalize meas-ures of aspects of innovation managementhowever to provide some synthesis and iden-tify gaps agreement regarding the nature ofinnovation management is needed The litera-ture lacks such consensus The concept is fre-quently disaggregated into component partsand scholars adopt their own partial views Asa result the operationalization of measures isfrequently idiosyncratic owing more to thepredilections of the researcher and the exigen-cies of the data than to the overarching objec-tives of synthesis or cumulation To organizecompare and contrast such measures we pro-pose a typology of elements of the innovationmanagement process
Many scholars have sought to identify thekey activities of the innovation managementprocess (Wolfe 1994) some of which are pre-sented as linear models (eg Daft 1978) andothers that are dynamic and recursive charac-terized by feedback and feed-forward loops(eg Schroeder et al 1989) While usefulthese models are limited from a measurementperspective first there are many competingmodels with consensus only evident at abstractlevels second models have principally been
generated in the context of technology and sogeneralizability is constrained third with afocus on activities models fail to take accountof the organizational pervasiveness of innova-tion and its socio-technical connectedness withall aspects of the organization or the levelsof integration envisaged in Rothwellrsquos (1992)fifth-generation process model Finally whilethe range and sequence of activities may varyacross organizations and projects their success-ful management is affected by a number offactors Cebon and Newton (1999) call thisthe lsquocapacity to make changersquo about whichthe literature generally is relatively silent(Neely and Hii 1998) Based on a review ofmodels we propose a seven-factor frameworkof meaningful categories specified in terms ofthe requisite organizational capabilities tomake and manage change (see Table 2)
In a review of the factors associated withnew product development (NPD) success Ernst(2002) echoes Cooper and Kleinschmidtrsquos(1995) influential five techno-centric factorsfor new product performance NPD processNPD strategy organization culture and manage-ment commitment This model though over-looks innovation in non-technical contextsand other important factors such as the role ofknowledge (Leonard and Sensniper 1998)
In their technical innovation audit toolChiesa et al (1996) describe process andperformance as the two foci of innovationmanagement measures They overlay lsquocoreprocessesrsquo with a set of lsquoenabling processesrsquothe latter describing the deployment ofresources and the effective use of appropriatesystems and tools governed by top manage-ment leadership and direction Finding thisapplicable only to lsquohardrsquo innovations Ver-haeghe and Kfir (2002) extended the audittool to an investigation of the processes thatsupport and enable both lsquohardrsquo and lsquosoftrsquo (ega research or consultancy project) innovationThe changes they made may appear semanticfor instance relabelling lsquoprocess innovationrsquo aslsquotechnology transferrsquo However the importantimplication is that the study extends the appli-cation of the instrument to service contexts
Table 1 Review strategy
Step 1 Establish review team and scope and nature of the question and search strings
Step 2 Undertake Delphi investigationStep 3 Preliminary search of electronic databasesStep 4 Develop analytic frameworkStep 5 Secondary search of electronic databases and
Delphi studyStep 6 Content analysis of data set sorting of
measures into first order categories defined by the analytic framework
Step 7 Review measures against framework for gaps
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ell Publishing Ltd 200625
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2006
Table 2 Innovation management models and organizing framework
Cooper and Kleinschmidt (1995)
Chiesa et al (1996)
Cormican and OrsquoSullivan (2004)
Goffin and Pfeiffer (1999) Burgelman et al (2004)
Verhaeghe and Kfir (2002)
Inputs Creativity and human resources
Resource availability Idea generation Technology acquisition
Knowledge management
Resource provision
Understand relevant technological developments and competitor strategies
Networking
Strategy NPD strategy Strategy and leadership
Innovation strategy
Strategic management
Organization and culture
Organizational culture Managementcommitment
Leadership Culture and climate
Structural and cultural context of the organization
Portfolio management
NPD process Systems and tools
Planning and selection
Portfolio management
Project management Communication and collaboration
Project management
Development
Commercialization Structure and performance
Commercialization
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Innovation management measurement A review
Furthermore they explicitly bounded theirmodel with notions of inputs and commercial-ized outputs
Cormican and OrsquoSullivan (2004 820) reflect-ing earlier studiesrsquo coverage of the organizationof innovation conceive of product innovationas a continuous and cross-functional processlsquoinvolving and integrating a growing numberof different competencies [inside the organiza-tion]rsquo So effective management of the processrequires successful adoption and adaption of asocio-technical systems approach to all aspectsof the organization critically including peopleand process as well as technology-relatedissues
While there are areas of commonalityacross these innovation management modelsno one model covers every dimension Thissuggests a need for a synthetic and integrativeframework to promote comparability and toenable future work to build on results found inprevious studies In column 1 of Table 2 wepresent such a framework derived from asynthesis of the studies presented in the othercolumns of the table The framework consistsof seven categories inputs knowledge manage-ment strategy organization and culture port-folio management project management andcommercialization
In the following sections we use these seveninductively derived categories as the organiz-ing framework for a discussion of innovationmanagement measurement For each of thesecategories we review the diverse literaturerelevant to the measurement of that typologicalcategory Within each category a series of sub-dimensions of measurement focus are identi-fied reflecting the distinctions and emphasesin the literature (see Table 3)
Measures of Innovation Management
Inputs Management
Inputs management is concerned with theresourcing of innovation activities and includesfactors ranging from finance to human andphysical resources to generating new ideas
The construct research and development (RampD)intensity has frequently been used as a globalmeasure of input Typically it is expressed asa ratio between expenditure (eg Parthasarthyand Hammond 2002) or numbers employedin RampD roles (Kivimaumlki et al 2000) and someexpression of output The relationship betweenRampD intensity and firm or innovation per-formance has been empirically demonstratedin several studies (eg Deeds 2001 Greve2003 Parthasarthy and Hammond 2002)However there is some equivocality in the lit-erature Stock et al (2001) note an inverted-Urelationship between RampD intensity and NPDperformance and Bougrain and Haudeville(2002) point out that it does not influence thefuture prospects of a project and is indeed animperfect measure of innovation activityFurther RampD is only one of several inputs intothe innovation process and therefore cannotbe regarded as an adequate proxy it also doesnot appear to be a very useful measure forsmall and medium-sized enterprises (SMEs)which may not have formal RampD activities ormay not record them (Kleinknecht 1987) orindeed for service industries which tend to havelow RampD intensity (Hipp and Grupp 2005)
Table 3 Innovation management measurement areas
Framework category Measurement areas
Inputs People Physical and financial resources Tools
Knowledge management
Idea generation Knowledge repository Information flows
Innovation strategy Strategic orientation Strategic leadership
Organization and culture
Culture Structure
Portfolio management
Riskreturn balance Optimization tool use
Project management Project efficiency Tools Communications Collaboration
Commercialization Market research Market testing Marketing and sales
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March 2006
High levels of RampD intensity are thereforenot necessarily evidence of good innovationpractice they may simply mask process inef-ficiencies (Cebon and Newton 1999 Dodgsonand Hinze 2000) However adequate fundingis clearly a critical input into the innovationprocess Expenditure data have long been apopular proxy measure of innovation inputlargely because of their ready availabilitySeveral different approaches both qualitativeand quantitative to measuring funding canbe identified total expenditure expenditureexpressed as a proportion of sales or revenuesand expenditure by item (organizational depart-ment patent innovation or scientist) (Geisler1995 Oliver et al 1999) Also there is aseries of perceptual measures that attempt todetermine the adequacy of funding (Atuahene-Gima 1995) Measures though tend princi-pally to be quantitative and express little otherthan funding level in particular few measuresattempt to determine the adequacy of fundingfor the innovation project Kerssens-vanDrongelen and de Weerd-Nederhof (1999)point to a lack of measurement proceduresto help managers diagnose poor innovationperformance or support improvement
A more helpful measure of inputs maytherefore be obtained by disaggregating inputsinto different types and measuring each inde-pendently before aggregating back to a meas-ure of overall inputs management Brown andSvenson (1988 30) define the inputs into theRampD system as lsquothe raw materials or stimulia system receives and processesrsquo includingpeople equipment facilities and funds Thisfundamental distinction between people toolsand physical and financial resources is widelymirrored in the literature
People factors have been measured as thenumber of people committed to the innovationtask (absolute numbers and relative to totalemployees) in terms of the mix of types ofpeople regarding cosmopolitanism and pro-pensity to innovate and in terms of skillsexperience and education Damanpour (1991)argues that a diversity of skills and experiencepermits more differentiated units from which
collaborative relationships can emerge and addsignificant value to innovation outcomesAlthough Baldridge and Burnham (1975) arguethat demographic characteristics (sex agecosmopolitanism education) do not appearto influence innovative behaviour amongindividuals more recent research suggests thatinnovating groups should comprise individualswith a mix of these characteristics (Amabile1998) Members with high levels of educationand self-esteem increase the effectiveness ofRampD project teams (Kessler and Chakrabarti1996) and individuals of greater educationalattainment with diverse backgrounds havebeen associated with more innovative teams(Bantel and Jackson 1989)
The propensity of an individual to innovatehas received considerable attention though itis difficult to measure Kirton (1976) devel-oped a 32-item questionnaire designed toestablish an individualrsquos position on anlsquoadaptorndashinnovatorrsquo continuum Scott andBruce (1994) operationalized an lsquoinnovativebehaviour measurersquo consisting of six itemsagainst which subordinates are measured byhierarchical superiors Finally the InnovationPotential Indicator (Patterson 2003) providesa framework for investigating individualbehaviours that might promote or inhibitinnovation in the workplace This measureis constructed around four dimensions anindividualrsquos motivation to change challeng-ing behaviour preferred approach to workand preference for tried and trustedmethods of work as opposed to doing thingsdifferently
Facilities or physical resources is a broadcategory that captures a range of inputs frombuildings to computer equipment Physicalresources can be counted or measured indollar terms However one important generalmeasure of facilities which cannot be so read-ily measured is slack Slack resources orunused capacity can be regarded as an import-ant catalyst for innovation Slack allowsfailures to be absorbed provides the opportu-nity for diversification and fosters a cultureof experimentation and protects against the
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Innovation management measurement A review
uncertainty of project failure (Kimberly 1981)An alternative view however suggests a nega-tive relationship slack can become synonymouswith waste and represents a cost that should beeliminated (Nohria and Gulati 1996) Typicallyfinancial measures of slack are used (Daman-pour 1991) although Miller and Friesen (1982)use both financial and human measures ofslack
Use of systems and tools is an importantinput to the innovation process (Bessant andFrancis 1997 Cooper et al 2004) Measuresidentified tend to relate to whether or not theorganization has or makes use of formal sys-tems and tools in support of innovation Thesecan be of various sorts such as the availabilityand use of tools and techniques for promotingcreativity (Amabile 1998 Rickards 1991Rochford 1991 Thompson 2003) or the avail-ability and use of systems of quality controlranging from informal methods to specifictechniques such as total quality management(TQM) (Souitaris 2002) While tool use canbe evaluated on a binary or degree of use scalethere is little other than Chiesa et alrsquos (1996)technical innovation audit that attempts tomeasure whether or not tool use is consistentwith a firmrsquos innovation requirements and isintegrated into its processes
We conclude that while there has been aconcentration on financial measurement ofinputs there is less emphasis on measuringother aspects of the category Even withinfinancial measures there are few that attemptto determine the adequacy of funding for theinnovation project Further most measuresreflect a preoccupation with RampD and NPDrather than other forms of innovation (egprocess business model) In particular thesofter inputs of skills and knowledge arepoorly represented by measurement instru-ments Tacit knowledge input appears not tobe well captured by extant measures and nomeasures of appropriate skill levels have beendeveloped This is an imbalance that needsto be addressed by further work to developa balanced set of measures covering allsub-dimensions of the input category
Knowledge Management
Knowledge absorption an organizationrsquosability to identify acquire and utilize externalknowledge can be critical to a firmrsquos success-ful operation (Zahra and George 2002) Theconcept of knowledge has received muchattention in recent years (eg Blackler 1995McAdam 1999 Nonaka 1991) and has beenasserted to play a critical role in the innova-tion process (Hull et al 2000) Knowledgemanagement is concerned with obtainingand communicating ideas and informationthat underlie innovation competencies andincludes idea generation absorptive capacityand networking Knowledge managementcovers the management of explicit andimplicit knowledge held by the organization(Davis 1998 Nonaka 1991) as well as theprocesses of gathering and using informa-tion The three areas within knowledgemanagement of importance for innovationmanagement identified in the literatureare idea generation knowledge repository(including the management of implicitand explicit knowledge) and informationflows (including information gathering andnetworking)
The importance of generating sufficientnumbers of ideas has been well established inthe literature Ideas are the raw materials forinnovation it is relatively inexpensive togenerate and screen ideas yet this can havesignificant impact on ultimate success orfailure (Cooper 1988) Several authors haveconceptualized the early stages of the innova-tion process as a somewhat fuzzy period(Kim and Wilemon 2002 Moenaert et al1995 Verworn 2002) including opportunityidentification opportunity analysis idea gen-esis idea selection and concept development(Koen et al 2001)
At the commencement of the innovationprocess when ideas are generated andexplored measures tend mostly to be quanti-tative inexpensive and rapid As the processprogresses and uncertainties with regard toappropriateness feasibility and business case
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March 2006
are reduced measurement approaches becomeincreasingly qualitative and possibly morecostly and time-consuming to deploy Meas-ures imply an assumption that the objective isto generate as many ideas as possible throughthe use of generative tools Several measuresattempt to count the number of ideas gener-ated in a period (cf Chiesa et al 1996 Leeet al 1996) while others probe the extent towhich organizations are using different gener-ative tools and techniques (cf Cebon andNewton 1999 Chiesa et al 1996 Loch et al1996 Rochford 1991 Szakonyi 1994Thompson 2003)
If knowledge is fundamental to innovationthen it should be possible to measure theaccumulated knowledge of the firm itsknowledge repository One aspect of innova-tion relates to combinations of new andexisting knowledge which privileges the con-tribution of internal and external knowledgeand the mechanisms by which it flows intoand within an organization (Galunic andRodan 1998 Nonaka and Takeuchi 1995 Pittand Clarke 1999) Central to this perspectiveis the idea of lsquoabsorptive capacityrsquo the firmrsquosability to absorb and put to use new knowledgeand involving lsquoan ability to recognize thevalue of new external knowledge assimilateit and apply it to commercial endsrsquo (Cohenand Levinthal 1990 128) Absorptive capacityresults from a prolonged process of invest-ment and knowledge accumulation within thefirm and its development is path dependentFirms with strong absorptive capabilities aremore likely to acquire knowledge and learneffectively from outside Higher levels ofabsorptive capacity appear to be positivelyrelated to innovation and performance (Chen2004 Tsai 2001) but it is impossible topredict what is the lsquorightrsquo level of investmentin absorptive capacity for any individualfirm (Cohen and Levinthal 1990) meaningthat it is not readily amenable to interna-tional benchmarking However the conceptualdevelopment and empirical studies infer orimply a range of organizational knowledgestates
Several quantitative approaches have beendeveloped for the measurement of importedtangible knowledge The most frequently usedapproach counts numbers or value of patentsbrought in However this restricts its applica-tion to contexts in which patents are signifi-cant and overlooks those industries wherethey do not feature For a while patent datawas widely accepted as a proxy measure forinnovation More recently however the valid-ity of patent statistics has been questionedpatents vary in their utility for organizationsand so their input value to the innovation can-not adequately be judged in terms of a cashprice (Griliches 1990 Pakes and Griliches1980) Only a few studies have attempted todevise measures for other contexts For exam-ple Kleinknecht (1987) constructed a ques-tion designed to capture the informal hours ofRampD work that are hypothesized to be hiddenwithin other activities or to take place outsideformal working hours
Patents represent codified knowledge butthe importance of tacit knowledge to organi-zational innovation is underscored in theresource-based approach (Barney 1991 Galu-nic and Rodan 1998 Grant 1991 Leonardand Sensiper 1998) Tacit knowledge is animportant resource when it is has value for theorganization is difficult for competitors toimitate is rare and can be operationalized bythe organization Of particular importance isits acquisition and use (Bess 1998) It can beacquired opportunistically or by a deliberatepolicy of search
Tacit knowledge is notoriously difficult tomeasure in organizational research andmethodologies for its investigation andmeasurement can be complex Ambrosiniand Bowman (2001) for example proposean approach that consists of causal mappingfacilitated by story-telling and the use of meta-phor Other attempts to capture tacit know-ledge and group memory have been reportedby Oliver et al (1999) At the level of theorganization Sveiby (1997) suggests thedifference between market value and netbook value as an indicator of the value to an
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Innovation management measurement A review
organization of intangible knowledge assetsThe first method is resource intensive whilein the second it is not clear how much of theidentified value can be attributed to inputs intoinnovation Tacit knowledge input appears notto be well captured by extant measures
Information flows into and within the firmare important in sparking ideas and in allow-ing the development of innovative conceptsThree measurement approaches to informa-tion flows can be identified first measures ofthe linkages that the innovating group main-tains with external organizations and sourcessecond measures of internal informationgathering processes Third measures of cus-tomer information contacts
Linkage measures determine whether or notthe organization has and maintains externallinkages with other organizations or sourcesof information eg through participation inresearch projects university links or attend-ance at trade shows (Atuahene-Gima 1995Tipping and Zeffren 1995) These are princi-pally dichotomous measures only infre-quently is there a measure that implies somesort of qualitative assessment of the nature ofthe linkages Cebon and Newtonrsquos (1999)measures suggest that quality and diversity oflinkage might be an important factor forexample visits to exemplary projects
Statistics on the use of formal methods ofinformation gathering such as project reviewsand the use of technical reports (Oliver et al1999) provide a frequently used approach tothe measurement of information gatheringCebon and Newton (1999) suggest bench-marking information gathering against com-petitorsrsquo activities to gauge how well theactivity is performed Another important areaabout which a firm needs understanding andinformation is customers Atuahene-Gima(1995) lists a series of measures specificallyaimed at examining the extent to which organ-izations make use of customers as a source ofinformation and include measures assessingthe adequacy of information and customercontact time (Lee et al 1996 Miller andFriesen 1982)
Innovation Strategy
Ramanujam and Mensch (1985) defineinnovation strategy as a timed sequence ofinternally consistent and conditional resourceallocation decisions that are designed to fulfilan organizationrsquos objectives Activities mustbe consistent with an overarching organiza-tional strategy that implies that managementmust take conscious decisions regardinginnovation goals (Sundbo 1997) Innovationstrategy is generally understood to describe anorganizationrsquos innovation posture with regardto its competitive environment in terms of itsnew product and market development plans(Dyer and Song 1998) This techno-centricview predominates in the literature andoverlooks those innovative initiatives that areinternally focused (for example the adoptionof new management techniques and prac-tices) In the conceptualization of innovationstrategy as an articulation of the organizationrsquoscommitment to the development of productsthat are new to itself andor to its marketsand because strategy does not operate in avacuum but requires a structural context twocomplementary approaches to its measure-ment which have been described as objectiveand subjective (Li and Atuahene-Gima 2001)can be identified
In the literature scholars principally haveadapted measures from strategic managementresearch to explore the existence nature andextent of innovation strategy Richard et al(2003) use three scale items drawn from thestrategic posture scale devised by Covin andSlevin (1989) who in turn draw on Milesand Snowrsquos (1978) lsquoprospectorsrsquo and Mintz-bergrsquos (1978) lsquoentrepreneurialrsquo organizationsfor their assessment of bank innovativenessThese studies classify organizations based ontheir approach to innovation using classifica-tions that are ontologically grounded in theassumption that innovation orientation can bedeciphered from quantitative interpretationsof new product and market activity
Other objective evidence of an organizationrsquosinnovation strategic posture may include many
copy Blackwell Publishing Ltd 2006 31
March 2006
of the input measures (such as level of RampDexpenditure) that we have already discussedIt is argued that it is not their absolute magni-tude but their magnitude relative to industryrivals that is significant As has been notedalthough these may be useful indicators ofcommitment or intent they could mask pro-cess inefficiencies However OrsquoBrienrsquos (2003)observation that an interaction betweenintended strategy and slack will influence per-formance suggests that process inefficienciesare less likely to occur where an innovationstrategy is not merely nominally adopted butis embedded in the culture behaviours andactions of the organization
In Li and Atuahene-Gimarsquos (2001) termsthe evidence for an embedded innovationstrategy is subjective and may include evalua-tions of an organizationrsquos emphasis on NPDsuch as resource allocation Saleh and Wang(1993) describe this as consisting of threemain components risk-taking proactivenessand persistent commitment to innovationThese include top management responsibilityfor innovation within the organization includ-ing specifying and communicating a directionfor innovation Cooper (1984) demonstratedthat new product performance is largelydecided by the strategy that top managementadopts The key components are the linkbetween innovation strategy and overall busi-ness goals (strategic orientation) and theprovision of leadership to make innovationhappen via a strong vision (Pinto and Prescott1988) for innovation a long-term commit-ment to innovation and a clear allocation ofresources (Cooper et al 2004) This distinc-tion between strategic planning or orientationand strategic vision or leadership is frequentlyreplicated in the literature
Two distinct types of strategic orientationmeasures can be identified in the literatureFirst those that measure whether the organi-zation has an innovation strategy this can beevaluated in several ways such as commit-ment to differentiated funding (White 2002)explicit expression (does the organizationhave an innovation strategy) (Miller and
Friesen 1982) and identifiable roles for newproducts and services (Cooper and Klein-schmidt 1990 Geisler 1995 Hauser andZettelmeyer 1997 Tipping and Zeffren 1995)The second type of measure regards strategyas a dynamic instrument that shapes andguides innovation in the organization Thesemeasures assume that strategy exists and asksquestions about how effective it is in shapingand guiding lsquoare structures and systemsalignedrsquo (Bessant 2003) lsquodo innovation goalsmatch strategic objectivesrsquo (Tipping andZeffren 1995) and further similar measures ofstrategic fit (Bessant 2003)
From a strategic leadership perspectiveDougherty and Cohen (1995) found thebehaviour of senior managers to be influentialThose chief executives most likely to makeinnovation happen are those with a clearvision of the future operation and direction oforganizational change and creativity (Shin andMcClomb 1998) Senior management areresponsible for developing and communicat-ing a vision for innovation being supportiveand adopting an attitude tolerant to changeand championing the notion of innovationwithin the organization Managerial toleranceto change creates the right climate for theimplementation stage of innovation whereconflict resolution might be necessary(Damanpour 1991)
Managerial attitude is also reflected innorms or support for innovation These are theexpectation approval and practical support ofattempts to introduce new and improved waysof doing things in the work environmentMeasures are mostly qualitative in nature andexplore perceptions mostly about the extentto which respondents recognize factors to bepresent (or absent)
Relatively few measures of championingand leadership have been uncovered in thisreview other than those that simply ask thequestion whether or not one or other existsperhaps through evidence of signs of commit-ment in annual reports (Chiesa et al 1996) orlevels of concern of top management (Coughlanet al 1994) or whether or not an individual
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Innovation management measurement A review
has been physically assigned to a particularrole (Souitaris 2002) Shane et al (1995) pro-vide a series of reflective questions designedto allow organizations to determine for them-selves their expectations and understandingof the role of champion For example lsquoto whatextent should the organization make it possiblefor the people working on an innovation tobend the rules of the organization to developthe innovation or be allowed to bypass certainpersonnel procedures to get people committedto an innovationrsquo
It must be emphasized that the dominantperspective on strategy in the literature isone that examines the relationship betweenstrategy and performance However a smallnumber of studies have examined the natureof the transitions of these states as organiza-tions adopt and embed an innovation strategyThis sub-section of the literature is under-pinned by the assumption that firms that fol-low innovation strategies differ from otherfirms in several respects It is apparent thatmore innovative firms adopt different opera-tional strategies to accommodate flexibilityand quality capabilities (Alegre-Vidal et al2004) have different capital managementpractices to facilitate slack resources (OrsquoBrien2003) are more tolerant of internal conflict insupport of creativity (Dyer and Song 1998)and maintain organizational structures that arein the lsquointermediate zone between order anddisorderrsquo (Brown and Eisenhardt 1997 22)What is clear from this literature is that anytransition towards an innovation strategy willnecessarily take several years because of theresources and energy that are necessary beforesuch a transformation can even be triggered(Hope Hailey 2001)
Organizational Culture and Structure
Burns and Stalker (1961) described a contin-gency approach to innovation managementlater developed to include concepts of func-tional differentiation specialization and inte-gration (Lawrence and Lorsch 1967) whichsuggests that environmental change prompts a
realignment of the fit between strategy andstructure That is to perform effectively anorganization must be appropriately differenti-ated specialized and integrated Pugh et al(1969) argued that the structure of an organi-zation is strongly related to the context withinwhich it functions Our closing discussion inthe previous section that the characteristics oforganizations following an innovation-focusedstrategy will differ from those that do not isconsistent with this contingency approach andin the following we focus on those dimen-sions of culture and structure that have beenidentified to differentiate between innovativeand non-innovative organizations
Organizational culture and structure concernthe way staff are grouped and the organiza-tional culture within which they work Therehas been considerable work on the situationaland psychological factors supportive of inno-vation in organizations Indeed it has beenwidely demonstrated that the perceived workenvironment (comprising both structural andcultural elements) does make a difference tothe level of innovation in organizations (Ama-bile et al 1996 Ekvall 1996) Creative andinnovative behaviours appear to be promotedby work environment factors (Mathisen andEinarsen 2004) Indeed it is clear that organ-izations can create environments in whichinnovation can be encouraged or hampered(Dougherty and Cohen 1995 Tidd et al1997) A common theme is that of the poly-chronic organization ndash one with the capacityto be in two states at once (Becker andWhisler 1973) Shepard (1967) describes thisas a two-state organization manoeuvreingbetween loose and tight and Mitroff (1987)as business-as-usual versus business-not-as-usual More prosaically this means organiza-tions need to be able for example to providesufficient freedom to allow for the explorationof creative possibilities but sufficient controlto manage innovation in an effective and effi-cient fashion
Ernst (2002) specifies a range of genericcharacteristics for the dedicated project groupassigned the innovation task multidisciplinarity
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March 2006
dedicated project leader inter-functional com-munication and co-operation qualificationsand know-how of the project leader teamautonomy and responsibility for the processAnd these factors are echoed throughout theliterature Rothwell (1992) refers to them aslsquocorporate conditionsrsquo Chiesa et al (1996)lsquoenabling processesrsquo and OrsquoReilly and Tushman(1997) lsquonorms for innovation and changersquoHowever despite their perceived importancethere is little guidance on how to measurethem
Volberda (1996) developed a conceptualmodel of alternative flexible organizationalforms that are argued to initiate or respondbetter to different types of competition Yet inspite of its importance there is relatively littleevidence of extant measures of flexibility inthe literature Rothwell (1992) and Ekvall(1996) propose a range of foci for measures oforganizational and production flexibility suchas lsquocorporate flexibility and responsiveness tochangersquo Coughlan (1994) considers the flexi-bility of resource allocation Several measuresof personnel flexibility are evident such aslsquothe adaptiveness of RampD personnel to tech-nology changesrsquo (Lee et al 1996) and lsquothewillingness to try new procedures and toexperiment with change so as to improve asituation or a processrsquo (Abbey and Dickson1983) At the level of the firm Liao et al(2003) introduce a similar construct ndash lsquoorgan-izational responsivenessrsquo
Organizational complexity the amount ofspecialization and task differentiation report-edly have a positive relationship (Damanpour1996) though Wolfe (1994) argues that it mayfavour initiation at the expense of implemen-tation Administrative intensity that is theratio of managers to total employees favoursadministrative innovation (Damanpour 19911996) but possibly at the cost of other pro-duct or technological innovations (Doughertyand Hardy 1996) Centralization the concen-tration of decision-making authority at the topof the organizational hierarchy and formaliza-tion the degree of emphasis on following rulesand procedures in role performance have both
been shown to have a negative impact on organ-izational innovation (Burns and Stalker 1961Damanpour 1991) Indeed rigidity in rulesand procedures may prohibit organizationaldecision-makers from seeking new sources ofinformation (Vyakarnam and Adams 2001)
Underlying the concept of the workplaceenvironment are issues related to the manage-ment of human resources and the creation ofa culture or climate in which individuals per-ceive innovation to be a desired and supportedorganizational objective There has been con-siderable empirical work on organizationalclimates supportive of the innovation processand several measurement instruments havebeen developed which Mathisen and Einarsen(2004) review The Team Climate Inventory(TCI) (Anderson and West 1996 1998) andthe KEYS instrument for assessing the workenvironment for creativity (Amabile et al 1996)have been found to be robust and rigorous
The TCI has been applied and validated inseveral studies (Agrell and Gustafson 1994Anderson and West 1998 Kivimaumlki et al1997 West and Anderson 1996) Replicationstudies using the TCI have found it canexplain a large part of the variance in teamsrsquoinnovative performance (Agrell and Gustafson1994) The TCI is based around four mainfactors participative safety (how participativeis the team in decision-making proceduresand how psychologically secure do teammembers feel about proposing new andimproved ways of doing things) support forinnovation (the degree of practical support forinnovation attempts contrasted with the rheto-ric of professed support by senior manage-ment) vision (how clearly defined sharedattainable and valued are the teamrsquos objectivesand vision) and task orientation (the com-mitment of the team to achieve the highestpossible standards of task performance includ-ing the use of constructive progress monitor-ing procedures) (Anderson and West 1996)Kivimaumlki et al (1997) suggested a fifth factorlsquointeraction frequencyrsquo relating to the regularityof contact and communication within theproject team
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Innovation management measurement A review
There is general agreement about theimportance of individual and group autonomyin the innovation process (Amabile 1998)Zien and Buckler (1997) emphasize the needfor freedom to experiment and the creation ofsafe havens without which innovation out-come might be constrained Measures ofautonomy mix both qualitative and quantita-tive approaches For example lsquothe degree offreedom personnel have in day-to-day operat-ing decisions such as when to work andhow to solve job problems including freedomfrom constant evaluation and close supervi-sionrsquo (Abbey and Dickson 1983) or lsquopercent-age of RampD portfolio with explicit businessunit andor corporate business managementsign-offrsquo (Tipping and Zeffren 1995) Addition-ally several authors have proposed generalmeasures of autonomy such as lsquofreedom tomake operating decisionsrsquo (Abbey and Dick-son 1983) or lsquodegree of empowermentrsquo (deLeede et al 1999 Tipping and Zeffren1995)
Morale and motivation are dimensions ofthe innovative organization that can be meas-ured as they pertain to individuals ndash lsquotheextent to which personnel are well rewardedrsquo(Abbey and Dickson 1983) to groups ndash lsquoourreward system is more group-based thanindividual-basedrsquo (Parthasarthy and Hammond2002) and to the organization as a whole ndashlsquothe degree to which the organization attemptsto excelrsquo (Abbey and Dickson 1983) Aspectsof morale and motivation that have beenmeasured include trust (Miller and Friesen1982) and job satisfaction which has beenmeasured by Keller (1986) on a 20-item scale
Organizational culture may include a sharedvision and it has been argued that the clearerthe vision the more effective it is as a facilitatorof innovation as it enables focused develop-ment of new ideas that can be assessed moreprecisely (West 1990) Pinto and Prescott(1988) found that the only factor to have pre-dictive power in terms of potential for successat all stages of the innovation process (con-ception planning execution and termination)was having a clearly stated missionvision
while West (1990) contends that the quality ofinnovation is partly a function of visionKeller (1986) adopts Kirtonrsquos (1976) 32-itemadopterndashinnovator inventory to determineindividual and team orientation to innovationVision is operationalized in the team climateinventory (cf Agrell and Gustafson 1994Anderson and West 1996 1998 West andAnderson 1996) and is deconstructed into aseries of sub-dimensions such as clarity shared-ness attainability and value with regard toteam objectives
Another aspect of culture is the propensityto take risks Saleh and Wang (1993) describethis as a willingness to confront risky oppor-tunities and tolerate failure and learn fromdoing so rather than recklessly gamblingSimilarly West (1990) demonstrated thathigher levels of participative safety facilitateinnovation Participative safety is non-judgmental supportive and characterized bysocio-emotional cohesiveness The attractive-ness of the organization as a place to workand undertake innovative activities is used byGeisler (1995) as an indicator of the climatefor innovation measured by numbers of can-didates applying for positions and the ageprofile of scientists and engineers Keller(1986) offers a slightly different perspectiveon participative safety with the constructlsquogroup cohesivenessrsquo which he operational-izes using an established five-item measure
This review has described a wide variety ofmeasures proposed for organizational cultureand structure Unlike some other aspects ofinnovation management this area has receivedextensive measurement attention HoweverHolbek (1988) argues that innovating organi-zations must adopt contrasting structures andclimates as they move from the initiation tothe implementation stages of innovationChesborough and Teece (1996) and Burns andStalker (1961) argue that there is a relation-ship between organizational design and typeof innovation It is a significant gap in innova-tion measurement that there appears to be nomeasures that adequately capture or articulatethis sense of structural shift
copy Blackwell Publishing Ltd 2006 35
March 2006
Portfolio Management
The importance of portfolio management tosuccessful product innovation has recentlyemerged as a key theme in the literature Itis important because of the rapidity at whichresources are consumed in the innovationprocess and the need for these to be managed(Cebon and Newton 1999) The effectivenesswith which an organization manages its RampDportfolio is often a key determinant of itscompetitive advantage (Bard et al 1988) Thefocus of portfolio management is on makingstrategic technological and resource choicesthat govern project selection and the futureshape of the organization (Cooper et al 1999)The problems of allocation of resources evalu-ation selection and termination of projects inachieving the optimal portfolio have beenextensively investigated The models all havethe objective of devising means to allocateresources to projects to obtain the optimalbalance in the product development portfoliothat is arriving at a portfolio that optimizesthe trade-off between returns and risks
The process of selecting innovation projectsrequires evaluation and resource allocationunder uncertain conditions It is argued that asystematic process guided by clear selectioncriteria can help optimize the use of limitedresources and enhance an organizationrsquoscompetitive position (Hall and Nauda 1990)The earliest models used return on investmentas the primary decision criteria (Bard et al 1988)Following this increasingly sophisticatedmathematical tools were developed to resolvewhat Schmidt and Freeland (1992) describe asthe constrained optimization problem that isto maximize the output (according to specifiedcriteria) from a subset of available inputsThese project selection models lsquohave beenvirtually ignored by industryrsquo (Schmidt andFreeland 1992 190) Part of the reason forthis is the inherent complexity of some ofthese models but also that they fail to takeinto account organizational decision andcommunication processes More recentlymodels have tried to take account of these
more qualitative factors involved in decisionprocesses
Scoring models require respondents tospecify the merit of any project proposalaccording to a set of a priori criteria whichmay be objective or subjective (Hall andNauda 1990) Economic and benefit modelsattempt to compute the cost benefit or finan-cial risk of pursuing a specific project whilemathematical programming approaches seekto optimize some objective function(s) subjectto specified resource constraints Algorithmsof varying complexity exist requiring moni-toring and significant data entry and whilemany are conceptually attractive surveys donot show widespread utilization of thesetechniques (Hall and Nauda 1990) Theseapproaches are all based on financial meas-ures such as internal rate of return net presentvalue and return on investment At the otherend of the spectrum qualitative approachessuch as peer review and mental checklistsrely on subjective perceptions and measuresof portfolio balance (Cooper et al 2001Henriksen and Traynor 1999)
Cooper et al (1999) find that best performersuse explicit formalized tools and consist-ently apply them to all projects considered tobelong to a portfolio A series of measures canbe identified that evaluate the whole portfolioof innovation projects to answer questionssuch as lsquois it balanced in terms of quantity ofshort- and long term-projectsrsquo and lsquois there abalance between high and low risk projectsand large and small projectsrsquo (Brenner 1994Cooper et al 2001) Another set seeks to iden-tify the extent to which portfolio evaluationmeasures are formalized within the organiza-tionrsquos processes (Cebon and Newton 1999Chiesa et al 1996 Farrukh et al 2000 Millerand Friesen 1982) Yet another approach is toview project evaluation and selection as anorganizational capability and attempt to deter-mine a level of proficiency (Szakonyi 1994)Finally there is a series of post hoc measuresof the appropriateness of project selections inthe light of results and alignment with busi-ness objectives (Lee et al 1996)
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Innovation management measurement A review
Project Management
Project management is concerned with theprocesses that turn the inputs into a marketa-ble innovation The innovation process iscomplex comprising a myriad of events andactivities some of which can be identified as asequence and some of which occur concur-rently and it is clearly possible that innova-tion processes will differ to some degreeacross organizations and even within organi-zations on a project-by-project basis Havingan efficient process that is able to manage theambiguity of the innovation is universally agreedto be critical to innovation (Globe et al 1973)
Various approaches have been taken tomodelling innovation processes as a series ofevents (Zaltman et al 1973) as a social interac-tion (Voss et al 1999) as a series of transactions(Nelson and Winter 1982) and as a process ofcommunication (Farrukh et al 2000) The his-tory of project management research is partlycharacterized by a debate regarding the extentto which events and activities within the processoccur in linearly sequential discrete identifiablestages (Zaltman et al 1973) or whether eventsare more disorganized (King 1992) or evenchaotic (Koput 1997) However despite thesedifferent viewpoints there are a number ofcommon elements that can be summarized asthe major components of the innovation projectmanagement These are project efficiencytools communications and collaboration
Several studies make efforts to measureproject management efficiency mostly in theform of comparisons between budget and actual(project costs project duration revenue fore-casting) Another measure of project manage-ment success is speed Innovation speed hasbeen positively correlated with product qual-ity or the degree to which it satisfies customerrequirements measures include speed (Hauserand Zettelmeyer 1997) performance againstschedule (Chiesa and Masella 1994) and dura-tion of the process (Cebon and Newton 1999)
To achieve efficiency it is widely recom-mended that organizations seeking to innovateshould establish formal processes for innovat-
ing and make use of tools and techniquesthat may facilitate innovative endeavours Thestage-gate process (Cooper 1990) is possiblythe most familiar of these but other method-ologies for innovation project managementexist including Phased Development Productand Cycle-time Excellence and Total Design(see Jenkins et al (1997) for a discussion)These methodologies have in common theseparation of the product development processinto structured and discrete stages which eachhave milestones in the form of quality controlcheckpoints at which stopgo decisions are madewith regard to the progress of the project Thesehighly structured approaches to the manage-ment of the innovation process began toemerge in the 1990s (Veryzer 1998) The useof structured tools and processes can bemeasured by project process evaluations forexample the use of a formal problem-findingproblem-solving cycle (Bessant 2003) the useof formal post-launch evaluation procedures(Atuahene-Gima 1995) or the use of certifiedprocesses (Chiesa et al 1996) These rathergeneral process measures have been supple-mented by measures of the use of specificinstruments and tools such as interactiveCAD or CAM (Maylor 2001) or the use ofcomputer-integrated manufacturing processes(Parthasarthy and Hammond 2002) but wenote that these measures betray the technologicaland NPD heritage that underpins many of theinnovation measures identified in this reviewEquivalents for service industry public ornot-for-profit sector innovations are somewhatlacking in the literature and constitute aresearch gap
Communications are important in projectmanagement Damanpour (1991) demon-strated the existence of a positive relationshipbetween internal communication and innova-tion Internal communication facilitates thedispersion of ideas within an organizationincreases the diversity and also contributes tothe team lsquoclimatersquo Communication can bemeasured by various integration mechanismseg committees numbers of meetings andcontacts (Damanpour 1991) There are also
copy Blackwell Publishing Ltd 2006 37
March 2006
measures of external communications whichtend to focus on whether communication istaking place the level at which it occurs andwith whom (Cebon and Newton 1999 Leeet al 1996 Rothwell 1992 Souitaris 2002)These measures of internal and external com-munication in the literature are based on bothsubjective evaluations and objective frequencycounts Subjective measures include lsquowe alwaysconsult supplierscustomers on new productideasrsquo (Parthasarthy and Hammond 2002) andlsquodegree of organization members involved andparticipating in extra-organizational professionalactivitiesrsquo (Damanpour 1991) Objective countsinclude (Damanpour 1991) lsquoextent of commu-nication amongst organizational units or groupsmeasured by various integrating mechanismssuch as numbers of committees and frequencyof meetingsrsquo (Anderson and West 1998)lsquofrequency of formal meetings concerningnew ideasrsquo (Souitaris 2002 Szakonyi 1994)lsquohow well do the technical and finance peoplecommunicate with one anotherrsquo
It is widely recognized that collaboratingwith suppliers (Bessant 2003) and customers(von Hippel 1986) can also make a significantcontribution to the innovation processMeasures of collaborative working includethe use of guest engineers (Maylor 2001) thepercentage of projects in co-operation withthird parties (Kerssens-van Drongelen andBilderbeek 1999) and the extent to whichdecision-making at top levels is characterizedby cross-functional discussions (Miller andFriesen 1982) In addition Jassawalla andSashittal (1999) identify some characteristicsof internal collaboration ie that teams arecharacterized by their mindfulness levels ofat-stakeness synergy and transparency butthey do not suggest how these aspects mightbe measured which constitutes a furtherresearch gap
Commercialization
Commercialization can be considered to bethe second of the two phases in Zaltman et alrsquos(1973) conceptualization of the innovation
process that is lsquoimplementationrsquo This canmean taking an innovation to market (Chakra-vorti 2004) but may also include convincingproduction managers to adopt a series of newtechniques available to them (Single andSpurgeon 1996) Indeed the successful intro-duction of new products and services intomarkets is important for the survival andgrowth of organizations Kelm et al (1995)regard commercialization as a transitionalphase in which the organization becomesless reliant on its technological capabilities(important during the activities of initiation)but more dependent on market dynamicsCommercialization is concerned with makingthe innovative process or product a commer-cial success it includes issues such as market-ing sales distribution and joint venturesWhile technical capabilities are important forthe early stages of the innovation process anddevelopment activities for the launch andimplementation stage it is marketing capabili-ties (market investigation market testingpromotion etc) that are significant (Calantoneand di Benedetto 1988 Globe et al 1973)Verhaeghe and Kfir (2002) consider aspectsof commercialization under the headings ofmarket analysis and monitoring reaching thecustomer and market planning
Firm-level measures of the launch or com-mercialization process appear to be relativelythin In their description of the RampD processBalachandra and Brockhoff (1995) character-ize the commercialization stage as requiringlsquobig bucksrsquo market reviews and organiza-tional commitment Most measures appear tobe not much more sophisticated than thisMeasures are frequently restricted to numbersof products launched in a given period (egYoon and Lilien 1985) There is thoughsome focus on market analysis and monitor-ing (Verhaeghe and Kfir 2002) Song andParry (1996) employ a set of measures oflaunch proficiency (salesforce distributionaland promotional support) that directly addressthe lsquoadequacyrsquo of the organizationrsquos facilities inthese areas as do Avlonitis et al (2001) Andthere is a limited mention of the commercial
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Innovation management measurement A review
intentions of an organizationrsquos competitors(Calantone and di Benedetto 1988) Thethemes of proficiency of personnel in this area(eg Atuahene-Gima 1995 Cebon and New-ton 1999) of adherence to a commercializa-tion schedule (eg Griffin and Page 1993) andof formal post-launch reviews (Atuahene-Gima 1995 von Zedtwitz 2002) can also befound in the literature
Even in the work that addresses post-project reviews very little attention is directedtowards measuring innovation launch orcommercialization However this comes aslittle surprise as Hultink et al (2000) recentlyobserved that little work has been done in thearea perhaps because at least in the innova-tion literature launch activities appear to beconsidered the domain of other specialistsparticularly marketers and the process is seenas separate from innovation In their studythey investigated launch decisions associatedwith success for consumer and business-to-business products Much of the literature thatconsiders launch and commercialization doesso from the viewpoint of the adopter andassesses rates of adoption and diffusion ofinnovations over time across populations(Kessler and Chakrabarti 1996 Van DenBulte 2000)
The area of commercialization appears tobe the least developed of the issues involvedin innovation management This is a huge gapbecause without this last step the previoussteps of assembling inputs project manage-ment etc will not result in a commerciallyviable outcome for the firm We believe thatthis area of innovation is in urgent need offurther development from both theory andmeasurement viewpoints
Discussion
Innovation management measurement is acritical discipline for both academics andpractitioners The capacity of organizations toinnovate is determined by multiple factors thatrelate both to their own internal organizationand to their market environment (Rothwell
et al 1974) and the task of generating andthen converting ideas into usable and market-able products requires high levels of inter-functional co-ordination and integration Thispaper opened with the general observationthat innovation measurement does not appearto take place routinely within managementpractice and that where it does it tends tofocus on output measures Further from therelatively small number of empirical studiesof measurement in practice measurement ofinnovation management appears to be under-taken infrequently in an ad hoc fashion andrelies on dated unbalanced or under-specifiedmodels of the innovation management phe-nomenon This suggests that a large part ofthe contemporary conceptualization of theinnovation management phenomenon is over-looked in practitionersrsquo measurement prac-tices and consequently that opportunities forthe more efficient and effective managementof the innovation process are not realizedSome possible reasons for this state of affairsare failure of academics to communicate ade-quately inconsistency inaccessibility andcomplexity of measures and poor synthesisand packaging
Following a review and synthesis of theliterature we proposed a seven-dimensionalconceptualization of the innovation manage-ment phenomenon and applied it to an exam-ination of the measurement problem Throughthe application of this framework to their ownparticular context it is suggested that practi-tioners will be able to conduct an evaluationof their own innovation management activityidentify gaps weaknesses or deficiencies andalso improvement potential Further it ishoped that organizations applying the frame-work will be able to tease out areas whereinnovation is only nominally adopted in theirprocesses and identify areas where attentionand resources might be focused
From the perspective of its management itis no longer sufficient to treat innovation as alinear process where resources are channelledat one end from which emerges a new prod-uct or process The measurement framework
copy Blackwell Publishing Ltd 2006 39
March 2006
presented in Table 2 shows the breadth andvariety of elements of innovation managementthat ideally need to be measured There havebeen several studies that have investigated thelimitations of various approaches to measure-ment (eg Werner and Souder 1997) and ofspecific measures (eg Trajtenberg 1990) asthey relate to the practice of innovation Thechoice of an appropriate RampD measurementmetric depends on the userrsquos needs in terms ofcomprehensiveness of measurement type ofRampD being measured available data andamount of effort the user can afford to allocateto the exercise Nonetheless the commonciting across various papers of the measuresnoted in the innovation management frame-work presented here suggests that a base setof innovation management measures isimplicitly present in the literature eventhough they may be fragmented in appearanceand presentation By pulling together theinnovation management framework fromdiverse sources this paper aims to bring suchissues into the open and identify relevantresearch gaps Table 2 can be viewed as thebasis for a balanced scorecard (Kaplan andNorton 1992) for innovation managementthat is as a balanced set of areas that need tobe measured in order to gain insight into anorganizationrsquos holistic ability to manage inno-vation Such multidimensional approaches tomeasurement have been found in other areasof management to be an improvement on sim-ple one-dimensional measures and to be ableto capture both short- and long-term aspectsof value creation in the firm (Phelps 2004)
We have identified a large number of meas-ures and approaches in a variety of innovationmanagement areas and we have constructed ageneric set of innovation management meas-urement areas to act as a framework for bal-anced measurement However in several ofthese areas measurement gaps have beenidentified These gaps are of two types valid-ity gaps and omission gaps Validity gaps arisewhere there is insufficient evidence that pro-posed measures actually do capture drivers oroutputs of innovation management for example
we have noted the objections to counts ofpatents or increasing expenditure on RampD beingused as measures of innovative organizationsSimilarly there is an absence of evidence thatthe large number of subjective perceptions ofinnovation management practices proposed(lsquowe do Arsquo lsquowe are good at Brsquo) actually relateto innovation management performance
Omission gaps occur where the importanceof an aspect of innovation management is sup-ported in the literature but measures for thisaspect are lacking Omission gaps are particu-larly prevalent in the elements of innovationmanagement such as knowledge managementinnovation strategy and commercializationthat do not feature strongly in the literature ontechnological and manufacturing-based inno-vation Another area traditionally not givenmuch emphasis in this literature is organiza-tion and culture which fortunately is bettertreated by the organizational behaviour litera-ture where a number of measures have beendeveloped Much of the current state of meas-urement practice can be traced back to the dis-ciplinersquos early manufacturing RampD and NPDfocus While product innovation is undoubt-edly important it is only one dimension of anorganizationrsquos innovation agenda Process andorganizational innovations are recognizedtoo as critical for competitiveness yet theseperspectives are inadequately represented inmeasurement terms
General areas of omission in this fieldrelate to an over-reliance on financial meas-ures rather than process measures for exam-ple the use of financial measures of portfoliooptimization but an absence of portfoliocapability measures a similar reliance oncodified knowledge such as patents to theexclusion of more intangible measures suchas tacit knowledge the measurement of levelsof resources or activities with no indication ofwhat an optimal level would be the measure-ment of drivers of innovation without meas-ures of whether these drivers are aligned witheach other and with firm strategy measures ofpresence that do not measure quality (eg theuse of dichotomous (yesno) measures that do
40 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
not indicate how well an action is implementedand measures of the presence of leadership(such as champions) but not of quality ofleadership) a general absence of measuresfor important properties of organizationalstructures such as flexibility and a lack ofmeasures of the match between structure andenvironment a technological and NPD bias toproject management measures and a relativeabsence of measures for service sectors apaucity of measures for internal communica-tions and a general lack of measures forcommercialization management ndash in particulararound marketing and sales capabilities forinnovative products and services All thesegaps provide the potential for further researchin innovation management measurement
The absence of an accepted framework ofinnovation management measures leads notonly to the gaps identified above but also toother problems in the literature One is that itis frequently unclear whether or not the met-rics used are of the researchersrsquo own devisingdrawn from the literature or are what are usedby the organizations being studied Nor is italways clear when metrics are devised orrecommended whether they are intended foruse in a research capacity or for managementtasks Further the measures proposed in theliterature often seem to be proposed abstractlywith little consideration given to the use ofmeasures as a management tool in the day-to-day context of managing innovation In theabsence of a comprehensive framework forinnovation management measurement organ-izations will inevitably resort to ad hoc andpartial metrics which can encourage wastefulpractice (eg measuring innovation managementcapability according to annual RampD spend)We hope that the framework constructed inthis paper will be useful in the constructionof comprehensive measures of innovationmanagement
Acknowledgements
The research reported here was supported bya grant from Cranfield School of Management
the authors gratefully acknowledge this supportFurther the authors are grateful to the editorsand two anonymous reviewers for their helpfuland insightful comments on previous versionsof this paper
Note
1 Corresponding author Telephone +44 (0) 207594 9137 e-mail radamsimperialacuk
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Alegre-Vidal J Lapiedra-Alcami R and Chiva-Gomez R (2004) Linking operations strategy andproduct innovation an empirical study of Spanishceramic tile producers Research Policy 33 829ndash839
Amabile TM (1998) How to kill creativity HarvardBusiness Review SeptemberndashOctober 77ndash87
Amabile TM Conti R Coon H Lazenby J andHerron M (1996) Assessing the work environ-ment for creativity Academy of Management Jour-nal 39 1154ndash1184
Ambrosini V and Bowman C (2001) Tacit know-ledge some suggestions for operationalisationJournal of Management Studies 38 811ndash829
Anderson N and West MA (1996) The teamclimate inventory development of the TCI and itsapplications in teambuilding for innovativenessEuropean Journal of Work and Organizational Psy-chology 5 53ndash66
Anderson NR and West MA (1998) Measuringclimate for work group innovation developmentand validation of the team climate inventory Jour-nal of Organizational Behavior 19 235ndash258
Atuahene-Gima K (1995) An exploratory analysisof the input of market orientation on new productperformance a contingency approach Journal ofProduct Innovation Management 12 275ndash293
Avlonitis GJ Papastathopoulou PG and Gounaris SP(2001) An empirically-based typology of productinnovativeness for new financial services success
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March 2006
and failure scenarios Journal of Product Innova-tion Management 18 324ndash342
Balachandra R and Brockhoff K (1995) Are RampDproject termination factors universal Research-Technology Management 38 31ndash36
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Barclay I (1992) The new product developmentprocess part 2 Improving the process of new prod-uct development RampD Management 4 307ndash317
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Bess G (1998) A first stage organization life cyclestudy of six emerging nonprofit organizations inLos Angeles Administration in Social Work 2235ndash52
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Bessant J and Francis D (1997) Implementing thenew product development process Technovation17 189ndash197
Blackler F (1995) Knowledge knowledge work andorganizations an overview and interpretationOrganization Studies 16 1021ndash1046
Bougrain F and Haudeville B (2002) Innovationcollaboration and SMEs internal research capaci-ties Research Policy 31 735ndash747
Brenner MS (1994) Practical RampD project prioriti-zation Research Technology Management 37 38ndash43
Brown MG and Svenson RA (1988) MeasuringRampD productivity Research-Technology Manage-ment JulyndashAugust 11ndash15
Brown SL and Eisenhardt KM (1997) The art ofcontinuous change linking complexity theory andtime-paced evolution in relentlessly shifting organiza-tions Administrative Science Quarterly 42 1ndash34
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Burns TR and Stalker GM (1961) The Manage-ment of Innovation London Tavistock
Calantone RJ and di Benedetto CA (1988) Anintegrative model of the new product developmentprocess an empirical validation Journal of Prod-uct Innovation Management 5 201ndash215
Cebon P and Newton P (1999) Innovation in firmstowards a framework for indicator developmentMelbourne Business School Working Paper 99-9
Chakravorti B (2004) The new rules for bringinginnovations to market Harvard Business Review82 58ndash67
Chen C-J (2004) The effects of knowledgeattribute alliance characteristics and absorptivecapacity on knowledge transfer performance RampDManagement 34 311ndash321
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Chiesa V Coughlan P and Voss A (1996) Devel-opment of a technical innovation audit Journal ofProduct Innovation Management 13 105ndash136
Cohen WM and Levinthal DA (1990) Absorptivecapacity a new perspective on learning and inno-vation Administrative Science Quarterly 35 128ndash152
Cooper RG (1979a) The dimensions of industrialnew product success and failure Journal of Mar-keting 43 93ndash103
Cooper RG (1979b) Identifying industrial newproduct success Project NewProd Industrial Mar-keting Management 8 124ndash135
Cooper RG (1984) The strategyndashperformance linkin product innovation RampD Management 14 247ndash259
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Innovation management measurement A review
Cooper RG (1990) Stage-gate systems a new toolfor managing new products Business Horizons 3344ndash56
Cooper RG and Kleinschmidt EJ (1990) Newproduct success factors a comparison of lsquokillsrsquoversus successes and failures RampD Management20 47ndash64
Cooper RG and Kleinschmidt EJ (1995) Bench-marking the firmrsquos critical success factors in newproduct development Journal of Product Innova-tion Management 12 374ndash391
Cooper RG Edgett SJ and Kleinschmidt EJ(1999) New product portfolio management prac-tices and performance Journal of Product Innova-tion Management 16 333ndash351
Cooper RG Edgett SJ and Kleinschmidt EJ(2001) Portfolio Management for New Products2nd edition Cambridge MA Perseus
Cooper RG Edgett SJ and Kleinschmidt EJ (2004)Benchmarking best NPD practices Research-Technology Management 47 50ndash59
Cordero R (1990) The measurement of innovationperformance in the firm an overview ResearchPolicy 19 185ndash192
Cormican K and OrsquoSullivan D (2004) Auditingbest practice for effective product innovationmanagement Technovation 24 819ndash829
Coughlan P Chiesa V and Voss C (1994) Evalu-ating leadership as an enabler of innovation InProceedings 2nd International Product Develop-ment Management Conference GothenburgSweden 30ndash31 May Brussels European Institutefor Advanced Studies in Management
Covin JG and Slevin DP (1989) Strategic manage-ment of small firms in hostile and benign environ-ments Strategic Management Journal 10 75ndash87
Daft R (1978) A dual-core model of organizationalinnovation Academy of Management Journal 21193ndash210
Damanpour F (1991) Organizational innovation ameta-analysis of effects of determinants and mod-erators Academy of Management Journal 34 555ndash590
Damanpour F (1996) Organizational complexity andinnovation developing and testing multiple contin-gency models Management Science 42 693ndash716
Davis MC (1998) Knowledge management Infor-mation Strategy The Executiversquos Journal 15 11ndash22
De Brentani U (1991) Success factors in developingnew business services European Journal of Mar-keting 25 33ndash60
De Leede J Nijhof AH and Fisscher OA (1999)The myth of self managing teams a reflection onthe allocation of responsibilities between individu-als teams and the organisation Journal of BusinessEthics 21 203ndash215
Deeds DL (2001) The role of RampD intensitytechnical development and absorptive capacity increating entrepreneurial wealth in high technologystart-ups Journal of Engineering and TechnologyManagement 18 29ndash47
Denyer D and Neely A (2004) Introduction to spe-cial issue innovation and productivity performancein the UK International Journal of ManagementReviews 45 131ndash135
Di Benedetto CA (1996) Identifying the key suc-cess factors in new product launch Journal ofProduct Innovation Management 16 530ndash544
Dodgson M and Hinze S (2000) Indicators used tomeasure the innovation process defects and possi-ble remedies Research Evaluation 8 101ndash114
Dougherty D and Cohen M (1995) Product inno-vation in mature firms In Bowman E and KogutB (eds) Redesigning the Firm New York OxfordUniversity Press
Dougherty D and Hardy C (1996) Sustained prod-uct innovation in large mature organizations over-coming innovation-to-organization problemsAcademy of Management Journal 39 1120ndash1153
DTI (1998) An Audience With Innovation Innovationin Management London Department of Trade andIndustry
Dyer B and Song XM (1998) Innovation strategyand sanctioned conflict a new edge in innovationJournal of Product Innovation Management 15505ndash519
Ekvall G (1996) Organizational climate for creativ-ity and innovation European Journal of Work andOrganizational Psychology 5 105ndash123
Ernst H (2002) Success factors of new productdevelopment a review of the empirical literatureInternational Journal of Management Reviews 41ndash40
Farrukh C Phaal R Probert D Gregory M andWright J (2000) Developing a process for therelative valuation of RampD programmes RampDManagement 30 43ndash53
Frenkel A Maital S and Grupp H (2000) Meas-uring dynamic technical change a technometricapproach International Journal of TechnologyManagement 20 429ndash441
Galunic DC and Rodan S (1998) Resource recom-binations and the firm knowledge structures and
copy Blackwell Publishing Ltd 2006 43
March 2006
the potential for Schumpeterian innovationStrategic Management Journal 19 1193ndash1201
Geisler E (1995) An integrated costndashperformancemodel of research-and-development evaluationOmega ndash International Journal of ManagementScience 23 281ndash294
Glaser BG and Strauss AL (1967) The Discoveryof Grounded Theory Strategies for QualitativeResearch London Aldine
Globe S Levy GW and Schwartz CM (1973)Key factors and events in the innovation processResearch Management 16 8ndash15
Goffin K and Pfeiffer R (1999) Innovation Man-agement in UK and German Manufacturing Com-panies London Anglo-German Foundation for theStudy of Industrial Society
Grant RM (1991) The resource-based theory ofcompetitive advantage implications for strategyformulation California Management Review 33114ndash135
Greve HR (2003) A behavioral theory of RampDexpenditures and innovations evidence fromshipbuilding Academy of Management Journal 46685ndash702
Griffin A (1997) PDMA research on new productdevelopment practices updating trends and bench-marking best practices Journal of Product Innova-tion Management 14 429ndash458
Griffin A and Page AL (1993) An interim reporton measuring product development success andfailure Journal of Product Innovation Manage-ment 10 291ndash308
Griliches Z (1990) Patent statistics as economicindicators a survey Journal of Economic Litera-ture 28 1661ndash1707
Hall DL and Nauda A (1990) An interactiveapproach for selecting IRampD projects IEEE Trans-actions on Engineering Management 37 126ndash133
Hauser JR and Zettelmeyer F (1997) Metrics toevaluate RDampE Research-Technology Manage-ment 40 32ndash38
Henriksen AD and Traynor AJ (1999) A practicalRampD project-selection scoring tool IEEE Trans-actions on Engineering Management 46 158ndash170
Hipp C and Grupp H (2005) Innovation in theservice sector the demand for service specific-innovation measurement concepts and typologiesResearch Policy 34 517ndash535
Holbek J (1988) The innovation design dilemmasome notes on its relevance and solutions InGroslashnhaug K and Kaufmann G (eds) Innovation
A Cross-Disciplinary Perspective NorwegianUniversity Press pp 253ndash277
Hope Hailey V (2001) Breaking the mould Innova-tion as a strategy for corporate renewal Inter-national Journal of Human Resource Management12 1126ndash1140
Hull R Coombs R and Peltu M (2000) Know-ledge management practices for innovation anaudit tool for improvement International Journalof Technology Management 20 633ndash656
Hultink EJ Hart S Robben HSJ and Griffin A(2000) Launch decisions and new product successan empirical comparison of consumer and indus-trial products Journal of Product Innovation Man-agement 17 5ndash23
Jassawalla AR and Sashittal HC (1999) Buildingcollaborative cross-functional new product teamsAcademy of Management Executive 13 50ndash63
Jenkins S Forbes S Durrani TS and BanerjeeSK (1997) Managing the product developmentprocess 1 An assessment International Journal ofTechnology Management 13 359ndash378
Kaplan RS and Norton DP (1992) The balancedscorecard ndash measures that drive performance HarvardBusiness Review JanuaryndashFebruary 71ndash79
Keller RT (1986) Predictors of performance ofproject groups in RampD organizations Academy ofManagement Journal 29 715ndash726
Kelm KM Narayanan VK and Pinches GE (1995)Shareholder value creation during research-and-development innovation and commercialization stagesAcademy of Management Journal 38 770ndash786
Kerssens-van Drongelen IC and Bilderbeek J(1999) RampD performance measurement morethan choosing a set of metrics RampD Management29 35ndash46
Kerssens-van Drongelen IC and de Weerd-Nederhof PC (1999) The use of performancemeasurement tools for balancing short- and long-term NPD performance International Journal ofInnovation Management 3 397ndash426
Kessler EH and Chakrabarti AK (1996) Innova-tion speed a conceptual model of context anteced-ents and outcomes Academy of ManagementReview 21 1143ndash1191
Kim B and Oh H (2002) An effective RampD per-formance measurement system survey of KoreanRampD researchers Omega ndash International Journalof Management Science 30 19ndash31
Kim J and Wilemon D (2002) Strategic issues inmanaging innovationrsquos fuzzy front-end EuropeanJournal of Innovation Management 5 27ndash39
44 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Kimberly JR (1981) Managerial innovation InNystrom PC and Starbuck WH (eds) Handbookof Organizational Design Vol 1 New YorkOxford University Press pp 84ndash104
King N (1992) Modelling the innovation process anempirical comparison of approaches Journal ofOccupational and Organizational Psychology 6589ndash100
Kirton MJ (1976) Adaptors and innovators adescription and measure Journal of Applied Psy-chology 61 622ndash629
Kivimaumlki M Kuk G Elovainio M Thomson LKalliomaumlki-Levanto T and Heikkilauml A (1997)The team climate inventory (TCI) ndash four or fivefactors Testing the structure of TCI in samples oflow and high complexity jobs Journal of Occupa-tional and Organizational Psychology 70 375ndash389
Kivimaumlki M Lansisalmi H Elovainio M Heik-kila A Lindstrom K Harisalo R Sipila K andPuolimatka L (2000) Communication as a deter-minant of organizational innovation RampD Man-agement 30 33ndash42
Kleinknecht A (1987) Measuring RampD in smallfirms how much are we missing Journal of Indus-trial Economics 36 253ndash256
Koen P Ajamian G Burkart R Clamen ADavidson J DrsquoAmore R Elkins C Herald KIncorvia M Johnson A Karol R Seibert RSlavejkov A and Wagner K (2001) Providingclarity and a common language to the lsquofuzzy front endrsquoResearch-Technology Management 44 46ndash55
Koput K (1997) A chaotic model of innovativesearch some answers many questions Organiza-tion Science 8 528ndash542
Lawrence PR and Lorsch JW (1967) Organizationand Environment Harvard MA Harvard Univer-sity Press
Lee M Son B and Lee H (1996) Measuring RampDeffectiveness in Korean companies Research-Technology Management 39 28ndash31
Leonard D and Sensiper S (1998) The role of tacitknowledge in group innovation California Man-agement Review 40 112ndash132
Leseure M Birdi K Bauer J Denyer D andNeely A (2004) Adoption of Promising PracticeA Systematic Review of the Literature LondonAdvanced Institute of Management Research
Li HY and Atuahene-Gima K (2001) Productinnovation strategy and the performance of newtechnology ventures in China Academy of Man-agement Journal 44 1123ndash1134
Liao J Welsch H and Stoica M (2003) Organiza-tional absorptive capacity and responsivenessan empirical investigation of growth-orientedSMEs Entrepreneurship Theory and Practice 2863ndash86
Linstone HA and Turoff M (eds) (2002) The Del-phi Method Techniques and Applications httpwwwisnjitedupubsdelphibook
Loch C Stein L and Terwiesch C (1996) Meas-uring development performance in the electronicsindustry Journal of Product Innovation Manage-ment 13 3ndash20
Mathisen GE and Einarsen S (2004) A review ofinstruments assessing creative and innovative envi-ronments within organizations Creativity ResearchJournal 16 119ndash140
Maylor H (2001) Assessing the relationshipbetween practice changes and process improve-ment in new product development Omega ndashInternational Journal of Management Science 2985ndash96
McAdam RMS (1999) The process of knowledgemanagement within organizations a critical assess-ment of both theory and practice Knowledge andProcess Management 6 101ndash113
McManus RJ Wilson S Delaney BC Fitzmau-rice DA Hyde CJ Tobias RS Jowett S andHobbs FDR (1998) Review of the usefulness ofcontacting other experts when conducting a litera-ture search for systematic reviews British MedicalJournal 317 1562ndash1563
Miles RE and Snow CC (1978) Organization StrategyStructure and Process New York McGraw-Hill
Miller D and Friesen PH (1982) Innovation inconservative and entrepreneurial firms two modelsof strategic momentum Strategic ManagementJournal 3 1ndash24
Mintzberg H (1978) Patterns in strategy formationManagement Science 24 934ndash948
Mitroff I (1987) Business Not As Usual Rethinkingour Individual Corporate and Industrial Strategiesfor Global Competition London Jossey-Bass
Moenaert RK De Meyer A Souder WE andDeschoolmeester D (1995) RampDMarketing com-munication during the fuzzy front-end IEEETransactions on Engineering Management 42243ndash257
Neely A and Hii J (1998) Innovation and BusinessPerformance A Literature Review Report producedfor Government Office for the Eastern RegionCambridge The Judge Institute of ManagementStudies University of Cambridge
copy Blackwell Publishing Ltd 2006 45
March 2006
Nelson R and Winter G (1982) An EvolutionaryTheory of Economic Change Cambridge MABelknap Press
Nohria N and Gulati R (1996) Is slack good or badfor innovation Academy of Management Journal39 1245ndash1264
Nonaka I (1991) The knowledge-creating companyHarvard Business Review NovemberndashDecember96ndash104
Nonaka I and Takeuchi H (1995) The KnowledgeCreating Company How Japanese CompaniesCreate the Dynamics of Innovation New YorkOxford University Press
OrsquoBrien JP (2003) The capital structure implica-tions of pursuing a strategy of innovation StrategicManagement Journal 24 415ndash431
OrsquoReilly CA and Tushman ML (1997) Using cul-ture for strategic advantage promoting innovationthrough social control In Tushman ML andAnderson P (eds) Managing Strategic Innovationand Change A Collection of Readings New YorkOxford University Press pp 200ndash216
Oliver N Dewberry E and Dostaler I (1999) Newproduct development performance and practice aninternational benchmarking study in the consumerelectronics industry In Proceedings 6th Inter-national Product Development Management Confer-ence Cambridge UK Brussels European Institutefor Advanced Studies in Management
Pakes A and Griliches Z (1980) Patents and RampDat the firm level a first report Economic Letters 5377ndash381
Parthasarthy R and Hammond J (2002) Productinnovation input and outcome moderating effectsof the innovation process Journal of Engineeringand Technology Management 19 75ndash91
Patterson F (2003) Innovation potential indicatorAvailable at wwwoppcouk
Phelps B (2004) Smart Business Metrics MeasureWhat Really Counts and Manage What Makes theDifference London FT-Prentice Hall
Pinto JK and Prescott JE (1988) Changes in crit-ical success factors over the stages in the projectlife cycle Journal of Management 14 5ndash18
Pitt M and Clarke K (1999) Competing on compe-tence a knowledge perspective on the managementof strategic innovation Technology Analysis andStrategic Management 11 301ndash316
Pittaway L Robertson M Munir K Denyer D andNeely A (2004) Networking and Innovation in theUK a Systematic Review of the Literature LondonAdvanced Institute of Management Research
Porter ME and Ketels CHM (2003) UK Compet-itiveness Moving to the Next Stage DTI Econom-ics Paper No 3 URN 03899
Pugh DS Hickson DJ Hinings CR and TurnerC (1969) The context of organization structuresAdministrative Science Quarterly 14 91ndash114
Ramanujam V and Mensch GO (1985) Improvingthe strategyndashinnovation link Journal of ProductInnovation Management 2 213ndash223
Richard O McMillan A Chadwick K and DwyerS (2003) Employing an innovation strategy inracially diverse workforces ndash effects on firm per-formance Group amp Organization Management 28107ndash126
Rickards T (1991) Innovation and creativity treesand pathways RampD Management 21 97ndash108
Rochford L (1991) Generating and screening newproduct ideas Industrial Marketing Management20 287ndash296
Rothwell R (1992) Successful industrial innovationcritical factors for the 1990s RampD Management22 221ndash239
Rothwell R Freeman C Horseley A JervisVTP Robertson AB and Townsend J (1974)SAPPHO updated ndash Project SAPPHO phase IIResearch Policy 3 258ndash291
Saleh SD and Wang CK (1993) The managementof innovation ndash strategy structure and organiza-tional climate IEEE Transactions on EngineeringManagement 40 14ndash21
Schmidt RL and Freeland JR (1992) Recentprogress in modelling RampD project-selection proc-esses IEEE Transactions on Engineering Manage-ment 39 189ndash201
Schroeder RG Van de Ven AH Scudder GDand Polley D (1989) The development of innova-tion ideas In Van de Ven AH Angle HL andPoole M (eds) Research on the Management ofInnovation The Minnesota Studies New YorkHarper amp Row pp 107ndash133
Scott S and Bruce R (1994) Determinants ofinnovative behaviour a path model of individualinnovation Academy of Management Journal 37580ndash607
Shane S Venkataraman S and MacMillan I (1995)Cultural differences in innovation championingstrategies Journal of Management 21 931ndash952
Shepard HA (1967) Innovation-resisting and inno-vation producing organizations Journal of Busi-ness 40 470ndash477
Shin J and McClomb GE (1998) Top executiveleadership and organizational innovation an
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Innovation management measurement A review
empirical investigation of nonprofit human serviceorganizations (HSOS) Administration in SocialWork 22 1ndash21
Single AW and Spurgeon WM (1996) Creatingand commercializing innovation inside a skunkworks Research-Technology Management 39 38ndash41
Song XM and Parry ME (1996) What separatesJapanese new product winners from losersJournal of Product Innovation Management 13422ndash439
Souitaris V (2002) Firm-specific competenciesdetermining technological innovation a survey inGreece RampD Management 32 61ndash77
Stock GN Greis NP and Fischer WA (2001)Absorptive capacity and new product developmentJournal of High Technology ManagementResearch 12 77ndash91
Sundbo J (1997) Management of innovation inservices Service Industries Journal 17 432ndash455
Sveiby KE (1997) The New Organizational WealthManaging and Measuring Knowledge-BasedAssets San Francisco CA Berrett-Koehler
Szakonyi R (1994) Measuring RampD effectiveness IResearch-Technology Management 37 27ndash32
Thompson L (2003) Improving the creativity oforganizational work groups Academy of Manage-ment Executive 17 96ndash109
Tidd J Bessant J and Pavitt K (1997) ManagingInnovation Integrating Technological Market andOrganizational Change Chichester UK JohnWiley
Tipping J and Zeffren E (1995) Assessing thevalue of your technology ResearchndashTechnologyManagement 38 22ndash40
Trajtenberg M (1990) A penny for your quotes ndashpatent citations and the value of innovations RandJournal of Economics 21 172ndash187
Tranfield D Denyer D and Smart P (2003)Towards a methodology for developing evidence-informed management knowledge by means of asystematic review British Journal of Management14 207ndash222
Tsai W (2001) Knowledge transfer in intraorganiza-tional networks effects of network position andabsorptive capacity on business unit innovation andperformance Academy of Management Journal44 996ndash1004
Van Den Bulte C (2000) New product diffusionacceleration measurement and analysis MarketingScience 19 366ndash380
Verhaeghe A and Kfir R (2002) Managing innovationin a knowledge intensive technology organisation(KITO) RampD Management 32 409ndash417
Verworn B (2002) The fuzzy front end of productdevelopment an exploratory study In Proceedings9th International Product Development ManagementConference Sophia Antipolis France pp 863ndash878Brussels European Institute for Advanced Studiesin Management
Veryzer RW (1998) Discontinuous innovation andthe new product development process Journal ofProduct Innovation Management 15 304ndash321
Volberda HW (1996) Towards the flexible formhow to remain vital in hypercompetitive environ-ments Organizational Science 7 359ndash374
Von Hippel E (1986) Lead users a source of novelproduct concepts Management Science 32 791ndash805
Von Zedtwitz M (2002) Organizational learningthrough post-project reviews in RampD RampD Man-agement 32 255ndash268
Voss C Chase R and Roth A (1999) Internationalservice study Decision Line May 4ndash7
Vyakarnam S and Adams RJ (2001) Institutionalbarriers to enterprise support an empirical studyEnvironment and Planning C Government andPolicy 19 335ndash353
Werner BM and Souder WE (1997) MeasuringRampD performance ndash state of the art Research-Technology Management 40 34ndash42
West MA (1990) The social psychology of innova-tion in groups In West MA and Farr JL (eds)Innovation and Creativity at Work Psychologicaland Organizational Strategies Chichester UKJohn Wiley pp 309ndash333
West MA and Anderson NR (1996) Innovation intop management teams Journal of Applied Psychol-ogy 81 680ndash693
White A (2002) Enabling factors in the front end ofthe innovation process In Proceedings 9thInternational Product Development ManagementConference Sophia Antipolis France BrusselsEuropean Institute for Advanced Studies inManagement pp 879ndash887
Wolfe RA (1994) Organizational innovationreview critique and suggested research direc-tions Journal of Management Studies 31 405ndash431
Yoon E and Lilien GL (1985) A new productlaunch-time decision model Journal of ProductInnovation Management 3 134ndash144
Zahra SA and George G (2002) Absorptivecapacity a review reconceptualization and
copy Blackwell Publishing Ltd 2006 47
March 2006
extension Academy of Management Review 27185
Zaltman G Duncan R and Holbek J (1973) Inno-vations and Organizations New York John Wiley
Zien KA and Buckler SA (1997) From experiencedreams to market crafting a culture of innovationJournal of Product Innovation Management 14274ndash287
Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
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ell Publishing Ltd 200625
March
2006
Table 2 Innovation management models and organizing framework
Cooper and Kleinschmidt (1995)
Chiesa et al (1996)
Cormican and OrsquoSullivan (2004)
Goffin and Pfeiffer (1999) Burgelman et al (2004)
Verhaeghe and Kfir (2002)
Inputs Creativity and human resources
Resource availability Idea generation Technology acquisition
Knowledge management
Resource provision
Understand relevant technological developments and competitor strategies
Networking
Strategy NPD strategy Strategy and leadership
Innovation strategy
Strategic management
Organization and culture
Organizational culture Managementcommitment
Leadership Culture and climate
Structural and cultural context of the organization
Portfolio management
NPD process Systems and tools
Planning and selection
Portfolio management
Project management Communication and collaboration
Project management
Development
Commercialization Structure and performance
Commercialization
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Innovation management measurement A review
Furthermore they explicitly bounded theirmodel with notions of inputs and commercial-ized outputs
Cormican and OrsquoSullivan (2004 820) reflect-ing earlier studiesrsquo coverage of the organizationof innovation conceive of product innovationas a continuous and cross-functional processlsquoinvolving and integrating a growing numberof different competencies [inside the organiza-tion]rsquo So effective management of the processrequires successful adoption and adaption of asocio-technical systems approach to all aspectsof the organization critically including peopleand process as well as technology-relatedissues
While there are areas of commonalityacross these innovation management modelsno one model covers every dimension Thissuggests a need for a synthetic and integrativeframework to promote comparability and toenable future work to build on results found inprevious studies In column 1 of Table 2 wepresent such a framework derived from asynthesis of the studies presented in the othercolumns of the table The framework consistsof seven categories inputs knowledge manage-ment strategy organization and culture port-folio management project management andcommercialization
In the following sections we use these seveninductively derived categories as the organiz-ing framework for a discussion of innovationmanagement measurement For each of thesecategories we review the diverse literaturerelevant to the measurement of that typologicalcategory Within each category a series of sub-dimensions of measurement focus are identi-fied reflecting the distinctions and emphasesin the literature (see Table 3)
Measures of Innovation Management
Inputs Management
Inputs management is concerned with theresourcing of innovation activities and includesfactors ranging from finance to human andphysical resources to generating new ideas
The construct research and development (RampD)intensity has frequently been used as a globalmeasure of input Typically it is expressed asa ratio between expenditure (eg Parthasarthyand Hammond 2002) or numbers employedin RampD roles (Kivimaumlki et al 2000) and someexpression of output The relationship betweenRampD intensity and firm or innovation per-formance has been empirically demonstratedin several studies (eg Deeds 2001 Greve2003 Parthasarthy and Hammond 2002)However there is some equivocality in the lit-erature Stock et al (2001) note an inverted-Urelationship between RampD intensity and NPDperformance and Bougrain and Haudeville(2002) point out that it does not influence thefuture prospects of a project and is indeed animperfect measure of innovation activityFurther RampD is only one of several inputs intothe innovation process and therefore cannotbe regarded as an adequate proxy it also doesnot appear to be a very useful measure forsmall and medium-sized enterprises (SMEs)which may not have formal RampD activities ormay not record them (Kleinknecht 1987) orindeed for service industries which tend to havelow RampD intensity (Hipp and Grupp 2005)
Table 3 Innovation management measurement areas
Framework category Measurement areas
Inputs People Physical and financial resources Tools
Knowledge management
Idea generation Knowledge repository Information flows
Innovation strategy Strategic orientation Strategic leadership
Organization and culture
Culture Structure
Portfolio management
Riskreturn balance Optimization tool use
Project management Project efficiency Tools Communications Collaboration
Commercialization Market research Market testing Marketing and sales
copy Blackwell Publishing Ltd 2006 27
March 2006
High levels of RampD intensity are thereforenot necessarily evidence of good innovationpractice they may simply mask process inef-ficiencies (Cebon and Newton 1999 Dodgsonand Hinze 2000) However adequate fundingis clearly a critical input into the innovationprocess Expenditure data have long been apopular proxy measure of innovation inputlargely because of their ready availabilitySeveral different approaches both qualitativeand quantitative to measuring funding canbe identified total expenditure expenditureexpressed as a proportion of sales or revenuesand expenditure by item (organizational depart-ment patent innovation or scientist) (Geisler1995 Oliver et al 1999) Also there is aseries of perceptual measures that attempt todetermine the adequacy of funding (Atuahene-Gima 1995) Measures though tend princi-pally to be quantitative and express little otherthan funding level in particular few measuresattempt to determine the adequacy of fundingfor the innovation project Kerssens-vanDrongelen and de Weerd-Nederhof (1999)point to a lack of measurement proceduresto help managers diagnose poor innovationperformance or support improvement
A more helpful measure of inputs maytherefore be obtained by disaggregating inputsinto different types and measuring each inde-pendently before aggregating back to a meas-ure of overall inputs management Brown andSvenson (1988 30) define the inputs into theRampD system as lsquothe raw materials or stimulia system receives and processesrsquo includingpeople equipment facilities and funds Thisfundamental distinction between people toolsand physical and financial resources is widelymirrored in the literature
People factors have been measured as thenumber of people committed to the innovationtask (absolute numbers and relative to totalemployees) in terms of the mix of types ofpeople regarding cosmopolitanism and pro-pensity to innovate and in terms of skillsexperience and education Damanpour (1991)argues that a diversity of skills and experiencepermits more differentiated units from which
collaborative relationships can emerge and addsignificant value to innovation outcomesAlthough Baldridge and Burnham (1975) arguethat demographic characteristics (sex agecosmopolitanism education) do not appearto influence innovative behaviour amongindividuals more recent research suggests thatinnovating groups should comprise individualswith a mix of these characteristics (Amabile1998) Members with high levels of educationand self-esteem increase the effectiveness ofRampD project teams (Kessler and Chakrabarti1996) and individuals of greater educationalattainment with diverse backgrounds havebeen associated with more innovative teams(Bantel and Jackson 1989)
The propensity of an individual to innovatehas received considerable attention though itis difficult to measure Kirton (1976) devel-oped a 32-item questionnaire designed toestablish an individualrsquos position on anlsquoadaptorndashinnovatorrsquo continuum Scott andBruce (1994) operationalized an lsquoinnovativebehaviour measurersquo consisting of six itemsagainst which subordinates are measured byhierarchical superiors Finally the InnovationPotential Indicator (Patterson 2003) providesa framework for investigating individualbehaviours that might promote or inhibitinnovation in the workplace This measureis constructed around four dimensions anindividualrsquos motivation to change challeng-ing behaviour preferred approach to workand preference for tried and trustedmethods of work as opposed to doing thingsdifferently
Facilities or physical resources is a broadcategory that captures a range of inputs frombuildings to computer equipment Physicalresources can be counted or measured indollar terms However one important generalmeasure of facilities which cannot be so read-ily measured is slack Slack resources orunused capacity can be regarded as an import-ant catalyst for innovation Slack allowsfailures to be absorbed provides the opportu-nity for diversification and fosters a cultureof experimentation and protects against the
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Innovation management measurement A review
uncertainty of project failure (Kimberly 1981)An alternative view however suggests a nega-tive relationship slack can become synonymouswith waste and represents a cost that should beeliminated (Nohria and Gulati 1996) Typicallyfinancial measures of slack are used (Daman-pour 1991) although Miller and Friesen (1982)use both financial and human measures ofslack
Use of systems and tools is an importantinput to the innovation process (Bessant andFrancis 1997 Cooper et al 2004) Measuresidentified tend to relate to whether or not theorganization has or makes use of formal sys-tems and tools in support of innovation Thesecan be of various sorts such as the availabilityand use of tools and techniques for promotingcreativity (Amabile 1998 Rickards 1991Rochford 1991 Thompson 2003) or the avail-ability and use of systems of quality controlranging from informal methods to specifictechniques such as total quality management(TQM) (Souitaris 2002) While tool use canbe evaluated on a binary or degree of use scalethere is little other than Chiesa et alrsquos (1996)technical innovation audit that attempts tomeasure whether or not tool use is consistentwith a firmrsquos innovation requirements and isintegrated into its processes
We conclude that while there has been aconcentration on financial measurement ofinputs there is less emphasis on measuringother aspects of the category Even withinfinancial measures there are few that attemptto determine the adequacy of funding for theinnovation project Further most measuresreflect a preoccupation with RampD and NPDrather than other forms of innovation (egprocess business model) In particular thesofter inputs of skills and knowledge arepoorly represented by measurement instru-ments Tacit knowledge input appears not tobe well captured by extant measures and nomeasures of appropriate skill levels have beendeveloped This is an imbalance that needsto be addressed by further work to developa balanced set of measures covering allsub-dimensions of the input category
Knowledge Management
Knowledge absorption an organizationrsquosability to identify acquire and utilize externalknowledge can be critical to a firmrsquos success-ful operation (Zahra and George 2002) Theconcept of knowledge has received muchattention in recent years (eg Blackler 1995McAdam 1999 Nonaka 1991) and has beenasserted to play a critical role in the innova-tion process (Hull et al 2000) Knowledgemanagement is concerned with obtainingand communicating ideas and informationthat underlie innovation competencies andincludes idea generation absorptive capacityand networking Knowledge managementcovers the management of explicit andimplicit knowledge held by the organization(Davis 1998 Nonaka 1991) as well as theprocesses of gathering and using informa-tion The three areas within knowledgemanagement of importance for innovationmanagement identified in the literatureare idea generation knowledge repository(including the management of implicitand explicit knowledge) and informationflows (including information gathering andnetworking)
The importance of generating sufficientnumbers of ideas has been well established inthe literature Ideas are the raw materials forinnovation it is relatively inexpensive togenerate and screen ideas yet this can havesignificant impact on ultimate success orfailure (Cooper 1988) Several authors haveconceptualized the early stages of the innova-tion process as a somewhat fuzzy period(Kim and Wilemon 2002 Moenaert et al1995 Verworn 2002) including opportunityidentification opportunity analysis idea gen-esis idea selection and concept development(Koen et al 2001)
At the commencement of the innovationprocess when ideas are generated andexplored measures tend mostly to be quanti-tative inexpensive and rapid As the processprogresses and uncertainties with regard toappropriateness feasibility and business case
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March 2006
are reduced measurement approaches becomeincreasingly qualitative and possibly morecostly and time-consuming to deploy Meas-ures imply an assumption that the objective isto generate as many ideas as possible throughthe use of generative tools Several measuresattempt to count the number of ideas gener-ated in a period (cf Chiesa et al 1996 Leeet al 1996) while others probe the extent towhich organizations are using different gener-ative tools and techniques (cf Cebon andNewton 1999 Chiesa et al 1996 Loch et al1996 Rochford 1991 Szakonyi 1994Thompson 2003)
If knowledge is fundamental to innovationthen it should be possible to measure theaccumulated knowledge of the firm itsknowledge repository One aspect of innova-tion relates to combinations of new andexisting knowledge which privileges the con-tribution of internal and external knowledgeand the mechanisms by which it flows intoand within an organization (Galunic andRodan 1998 Nonaka and Takeuchi 1995 Pittand Clarke 1999) Central to this perspectiveis the idea of lsquoabsorptive capacityrsquo the firmrsquosability to absorb and put to use new knowledgeand involving lsquoan ability to recognize thevalue of new external knowledge assimilateit and apply it to commercial endsrsquo (Cohenand Levinthal 1990 128) Absorptive capacityresults from a prolonged process of invest-ment and knowledge accumulation within thefirm and its development is path dependentFirms with strong absorptive capabilities aremore likely to acquire knowledge and learneffectively from outside Higher levels ofabsorptive capacity appear to be positivelyrelated to innovation and performance (Chen2004 Tsai 2001) but it is impossible topredict what is the lsquorightrsquo level of investmentin absorptive capacity for any individualfirm (Cohen and Levinthal 1990) meaningthat it is not readily amenable to interna-tional benchmarking However the conceptualdevelopment and empirical studies infer orimply a range of organizational knowledgestates
Several quantitative approaches have beendeveloped for the measurement of importedtangible knowledge The most frequently usedapproach counts numbers or value of patentsbrought in However this restricts its applica-tion to contexts in which patents are signifi-cant and overlooks those industries wherethey do not feature For a while patent datawas widely accepted as a proxy measure forinnovation More recently however the valid-ity of patent statistics has been questionedpatents vary in their utility for organizationsand so their input value to the innovation can-not adequately be judged in terms of a cashprice (Griliches 1990 Pakes and Griliches1980) Only a few studies have attempted todevise measures for other contexts For exam-ple Kleinknecht (1987) constructed a ques-tion designed to capture the informal hours ofRampD work that are hypothesized to be hiddenwithin other activities or to take place outsideformal working hours
Patents represent codified knowledge butthe importance of tacit knowledge to organi-zational innovation is underscored in theresource-based approach (Barney 1991 Galu-nic and Rodan 1998 Grant 1991 Leonardand Sensiper 1998) Tacit knowledge is animportant resource when it is has value for theorganization is difficult for competitors toimitate is rare and can be operationalized bythe organization Of particular importance isits acquisition and use (Bess 1998) It can beacquired opportunistically or by a deliberatepolicy of search
Tacit knowledge is notoriously difficult tomeasure in organizational research andmethodologies for its investigation andmeasurement can be complex Ambrosiniand Bowman (2001) for example proposean approach that consists of causal mappingfacilitated by story-telling and the use of meta-phor Other attempts to capture tacit know-ledge and group memory have been reportedby Oliver et al (1999) At the level of theorganization Sveiby (1997) suggests thedifference between market value and netbook value as an indicator of the value to an
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Innovation management measurement A review
organization of intangible knowledge assetsThe first method is resource intensive whilein the second it is not clear how much of theidentified value can be attributed to inputs intoinnovation Tacit knowledge input appears notto be well captured by extant measures
Information flows into and within the firmare important in sparking ideas and in allow-ing the development of innovative conceptsThree measurement approaches to informa-tion flows can be identified first measures ofthe linkages that the innovating group main-tains with external organizations and sourcessecond measures of internal informationgathering processes Third measures of cus-tomer information contacts
Linkage measures determine whether or notthe organization has and maintains externallinkages with other organizations or sourcesof information eg through participation inresearch projects university links or attend-ance at trade shows (Atuahene-Gima 1995Tipping and Zeffren 1995) These are princi-pally dichotomous measures only infre-quently is there a measure that implies somesort of qualitative assessment of the nature ofthe linkages Cebon and Newtonrsquos (1999)measures suggest that quality and diversity oflinkage might be an important factor forexample visits to exemplary projects
Statistics on the use of formal methods ofinformation gathering such as project reviewsand the use of technical reports (Oliver et al1999) provide a frequently used approach tothe measurement of information gatheringCebon and Newton (1999) suggest bench-marking information gathering against com-petitorsrsquo activities to gauge how well theactivity is performed Another important areaabout which a firm needs understanding andinformation is customers Atuahene-Gima(1995) lists a series of measures specificallyaimed at examining the extent to which organ-izations make use of customers as a source ofinformation and include measures assessingthe adequacy of information and customercontact time (Lee et al 1996 Miller andFriesen 1982)
Innovation Strategy
Ramanujam and Mensch (1985) defineinnovation strategy as a timed sequence ofinternally consistent and conditional resourceallocation decisions that are designed to fulfilan organizationrsquos objectives Activities mustbe consistent with an overarching organiza-tional strategy that implies that managementmust take conscious decisions regardinginnovation goals (Sundbo 1997) Innovationstrategy is generally understood to describe anorganizationrsquos innovation posture with regardto its competitive environment in terms of itsnew product and market development plans(Dyer and Song 1998) This techno-centricview predominates in the literature andoverlooks those innovative initiatives that areinternally focused (for example the adoptionof new management techniques and prac-tices) In the conceptualization of innovationstrategy as an articulation of the organizationrsquoscommitment to the development of productsthat are new to itself andor to its marketsand because strategy does not operate in avacuum but requires a structural context twocomplementary approaches to its measure-ment which have been described as objectiveand subjective (Li and Atuahene-Gima 2001)can be identified
In the literature scholars principally haveadapted measures from strategic managementresearch to explore the existence nature andextent of innovation strategy Richard et al(2003) use three scale items drawn from thestrategic posture scale devised by Covin andSlevin (1989) who in turn draw on Milesand Snowrsquos (1978) lsquoprospectorsrsquo and Mintz-bergrsquos (1978) lsquoentrepreneurialrsquo organizationsfor their assessment of bank innovativenessThese studies classify organizations based ontheir approach to innovation using classifica-tions that are ontologically grounded in theassumption that innovation orientation can bedeciphered from quantitative interpretationsof new product and market activity
Other objective evidence of an organizationrsquosinnovation strategic posture may include many
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March 2006
of the input measures (such as level of RampDexpenditure) that we have already discussedIt is argued that it is not their absolute magni-tude but their magnitude relative to industryrivals that is significant As has been notedalthough these may be useful indicators ofcommitment or intent they could mask pro-cess inefficiencies However OrsquoBrienrsquos (2003)observation that an interaction betweenintended strategy and slack will influence per-formance suggests that process inefficienciesare less likely to occur where an innovationstrategy is not merely nominally adopted butis embedded in the culture behaviours andactions of the organization
In Li and Atuahene-Gimarsquos (2001) termsthe evidence for an embedded innovationstrategy is subjective and may include evalua-tions of an organizationrsquos emphasis on NPDsuch as resource allocation Saleh and Wang(1993) describe this as consisting of threemain components risk-taking proactivenessand persistent commitment to innovationThese include top management responsibilityfor innovation within the organization includ-ing specifying and communicating a directionfor innovation Cooper (1984) demonstratedthat new product performance is largelydecided by the strategy that top managementadopts The key components are the linkbetween innovation strategy and overall busi-ness goals (strategic orientation) and theprovision of leadership to make innovationhappen via a strong vision (Pinto and Prescott1988) for innovation a long-term commit-ment to innovation and a clear allocation ofresources (Cooper et al 2004) This distinc-tion between strategic planning or orientationand strategic vision or leadership is frequentlyreplicated in the literature
Two distinct types of strategic orientationmeasures can be identified in the literatureFirst those that measure whether the organi-zation has an innovation strategy this can beevaluated in several ways such as commit-ment to differentiated funding (White 2002)explicit expression (does the organizationhave an innovation strategy) (Miller and
Friesen 1982) and identifiable roles for newproducts and services (Cooper and Klein-schmidt 1990 Geisler 1995 Hauser andZettelmeyer 1997 Tipping and Zeffren 1995)The second type of measure regards strategyas a dynamic instrument that shapes andguides innovation in the organization Thesemeasures assume that strategy exists and asksquestions about how effective it is in shapingand guiding lsquoare structures and systemsalignedrsquo (Bessant 2003) lsquodo innovation goalsmatch strategic objectivesrsquo (Tipping andZeffren 1995) and further similar measures ofstrategic fit (Bessant 2003)
From a strategic leadership perspectiveDougherty and Cohen (1995) found thebehaviour of senior managers to be influentialThose chief executives most likely to makeinnovation happen are those with a clearvision of the future operation and direction oforganizational change and creativity (Shin andMcClomb 1998) Senior management areresponsible for developing and communicat-ing a vision for innovation being supportiveand adopting an attitude tolerant to changeand championing the notion of innovationwithin the organization Managerial toleranceto change creates the right climate for theimplementation stage of innovation whereconflict resolution might be necessary(Damanpour 1991)
Managerial attitude is also reflected innorms or support for innovation These are theexpectation approval and practical support ofattempts to introduce new and improved waysof doing things in the work environmentMeasures are mostly qualitative in nature andexplore perceptions mostly about the extentto which respondents recognize factors to bepresent (or absent)
Relatively few measures of championingand leadership have been uncovered in thisreview other than those that simply ask thequestion whether or not one or other existsperhaps through evidence of signs of commit-ment in annual reports (Chiesa et al 1996) orlevels of concern of top management (Coughlanet al 1994) or whether or not an individual
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Innovation management measurement A review
has been physically assigned to a particularrole (Souitaris 2002) Shane et al (1995) pro-vide a series of reflective questions designedto allow organizations to determine for them-selves their expectations and understandingof the role of champion For example lsquoto whatextent should the organization make it possiblefor the people working on an innovation tobend the rules of the organization to developthe innovation or be allowed to bypass certainpersonnel procedures to get people committedto an innovationrsquo
It must be emphasized that the dominantperspective on strategy in the literature isone that examines the relationship betweenstrategy and performance However a smallnumber of studies have examined the natureof the transitions of these states as organiza-tions adopt and embed an innovation strategyThis sub-section of the literature is under-pinned by the assumption that firms that fol-low innovation strategies differ from otherfirms in several respects It is apparent thatmore innovative firms adopt different opera-tional strategies to accommodate flexibilityand quality capabilities (Alegre-Vidal et al2004) have different capital managementpractices to facilitate slack resources (OrsquoBrien2003) are more tolerant of internal conflict insupport of creativity (Dyer and Song 1998)and maintain organizational structures that arein the lsquointermediate zone between order anddisorderrsquo (Brown and Eisenhardt 1997 22)What is clear from this literature is that anytransition towards an innovation strategy willnecessarily take several years because of theresources and energy that are necessary beforesuch a transformation can even be triggered(Hope Hailey 2001)
Organizational Culture and Structure
Burns and Stalker (1961) described a contin-gency approach to innovation managementlater developed to include concepts of func-tional differentiation specialization and inte-gration (Lawrence and Lorsch 1967) whichsuggests that environmental change prompts a
realignment of the fit between strategy andstructure That is to perform effectively anorganization must be appropriately differenti-ated specialized and integrated Pugh et al(1969) argued that the structure of an organi-zation is strongly related to the context withinwhich it functions Our closing discussion inthe previous section that the characteristics oforganizations following an innovation-focusedstrategy will differ from those that do not isconsistent with this contingency approach andin the following we focus on those dimen-sions of culture and structure that have beenidentified to differentiate between innovativeand non-innovative organizations
Organizational culture and structure concernthe way staff are grouped and the organiza-tional culture within which they work Therehas been considerable work on the situationaland psychological factors supportive of inno-vation in organizations Indeed it has beenwidely demonstrated that the perceived workenvironment (comprising both structural andcultural elements) does make a difference tothe level of innovation in organizations (Ama-bile et al 1996 Ekvall 1996) Creative andinnovative behaviours appear to be promotedby work environment factors (Mathisen andEinarsen 2004) Indeed it is clear that organ-izations can create environments in whichinnovation can be encouraged or hampered(Dougherty and Cohen 1995 Tidd et al1997) A common theme is that of the poly-chronic organization ndash one with the capacityto be in two states at once (Becker andWhisler 1973) Shepard (1967) describes thisas a two-state organization manoeuvreingbetween loose and tight and Mitroff (1987)as business-as-usual versus business-not-as-usual More prosaically this means organiza-tions need to be able for example to providesufficient freedom to allow for the explorationof creative possibilities but sufficient controlto manage innovation in an effective and effi-cient fashion
Ernst (2002) specifies a range of genericcharacteristics for the dedicated project groupassigned the innovation task multidisciplinarity
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March 2006
dedicated project leader inter-functional com-munication and co-operation qualificationsand know-how of the project leader teamautonomy and responsibility for the processAnd these factors are echoed throughout theliterature Rothwell (1992) refers to them aslsquocorporate conditionsrsquo Chiesa et al (1996)lsquoenabling processesrsquo and OrsquoReilly and Tushman(1997) lsquonorms for innovation and changersquoHowever despite their perceived importancethere is little guidance on how to measurethem
Volberda (1996) developed a conceptualmodel of alternative flexible organizationalforms that are argued to initiate or respondbetter to different types of competition Yet inspite of its importance there is relatively littleevidence of extant measures of flexibility inthe literature Rothwell (1992) and Ekvall(1996) propose a range of foci for measures oforganizational and production flexibility suchas lsquocorporate flexibility and responsiveness tochangersquo Coughlan (1994) considers the flexi-bility of resource allocation Several measuresof personnel flexibility are evident such aslsquothe adaptiveness of RampD personnel to tech-nology changesrsquo (Lee et al 1996) and lsquothewillingness to try new procedures and toexperiment with change so as to improve asituation or a processrsquo (Abbey and Dickson1983) At the level of the firm Liao et al(2003) introduce a similar construct ndash lsquoorgan-izational responsivenessrsquo
Organizational complexity the amount ofspecialization and task differentiation report-edly have a positive relationship (Damanpour1996) though Wolfe (1994) argues that it mayfavour initiation at the expense of implemen-tation Administrative intensity that is theratio of managers to total employees favoursadministrative innovation (Damanpour 19911996) but possibly at the cost of other pro-duct or technological innovations (Doughertyand Hardy 1996) Centralization the concen-tration of decision-making authority at the topof the organizational hierarchy and formaliza-tion the degree of emphasis on following rulesand procedures in role performance have both
been shown to have a negative impact on organ-izational innovation (Burns and Stalker 1961Damanpour 1991) Indeed rigidity in rulesand procedures may prohibit organizationaldecision-makers from seeking new sources ofinformation (Vyakarnam and Adams 2001)
Underlying the concept of the workplaceenvironment are issues related to the manage-ment of human resources and the creation ofa culture or climate in which individuals per-ceive innovation to be a desired and supportedorganizational objective There has been con-siderable empirical work on organizationalclimates supportive of the innovation processand several measurement instruments havebeen developed which Mathisen and Einarsen(2004) review The Team Climate Inventory(TCI) (Anderson and West 1996 1998) andthe KEYS instrument for assessing the workenvironment for creativity (Amabile et al 1996)have been found to be robust and rigorous
The TCI has been applied and validated inseveral studies (Agrell and Gustafson 1994Anderson and West 1998 Kivimaumlki et al1997 West and Anderson 1996) Replicationstudies using the TCI have found it canexplain a large part of the variance in teamsrsquoinnovative performance (Agrell and Gustafson1994) The TCI is based around four mainfactors participative safety (how participativeis the team in decision-making proceduresand how psychologically secure do teammembers feel about proposing new andimproved ways of doing things) support forinnovation (the degree of practical support forinnovation attempts contrasted with the rheto-ric of professed support by senior manage-ment) vision (how clearly defined sharedattainable and valued are the teamrsquos objectivesand vision) and task orientation (the com-mitment of the team to achieve the highestpossible standards of task performance includ-ing the use of constructive progress monitor-ing procedures) (Anderson and West 1996)Kivimaumlki et al (1997) suggested a fifth factorlsquointeraction frequencyrsquo relating to the regularityof contact and communication within theproject team
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Innovation management measurement A review
There is general agreement about theimportance of individual and group autonomyin the innovation process (Amabile 1998)Zien and Buckler (1997) emphasize the needfor freedom to experiment and the creation ofsafe havens without which innovation out-come might be constrained Measures ofautonomy mix both qualitative and quantita-tive approaches For example lsquothe degree offreedom personnel have in day-to-day operat-ing decisions such as when to work andhow to solve job problems including freedomfrom constant evaluation and close supervi-sionrsquo (Abbey and Dickson 1983) or lsquopercent-age of RampD portfolio with explicit businessunit andor corporate business managementsign-offrsquo (Tipping and Zeffren 1995) Addition-ally several authors have proposed generalmeasures of autonomy such as lsquofreedom tomake operating decisionsrsquo (Abbey and Dick-son 1983) or lsquodegree of empowermentrsquo (deLeede et al 1999 Tipping and Zeffren1995)
Morale and motivation are dimensions ofthe innovative organization that can be meas-ured as they pertain to individuals ndash lsquotheextent to which personnel are well rewardedrsquo(Abbey and Dickson 1983) to groups ndash lsquoourreward system is more group-based thanindividual-basedrsquo (Parthasarthy and Hammond2002) and to the organization as a whole ndashlsquothe degree to which the organization attemptsto excelrsquo (Abbey and Dickson 1983) Aspectsof morale and motivation that have beenmeasured include trust (Miller and Friesen1982) and job satisfaction which has beenmeasured by Keller (1986) on a 20-item scale
Organizational culture may include a sharedvision and it has been argued that the clearerthe vision the more effective it is as a facilitatorof innovation as it enables focused develop-ment of new ideas that can be assessed moreprecisely (West 1990) Pinto and Prescott(1988) found that the only factor to have pre-dictive power in terms of potential for successat all stages of the innovation process (con-ception planning execution and termination)was having a clearly stated missionvision
while West (1990) contends that the quality ofinnovation is partly a function of visionKeller (1986) adopts Kirtonrsquos (1976) 32-itemadopterndashinnovator inventory to determineindividual and team orientation to innovationVision is operationalized in the team climateinventory (cf Agrell and Gustafson 1994Anderson and West 1996 1998 West andAnderson 1996) and is deconstructed into aseries of sub-dimensions such as clarity shared-ness attainability and value with regard toteam objectives
Another aspect of culture is the propensityto take risks Saleh and Wang (1993) describethis as a willingness to confront risky oppor-tunities and tolerate failure and learn fromdoing so rather than recklessly gamblingSimilarly West (1990) demonstrated thathigher levels of participative safety facilitateinnovation Participative safety is non-judgmental supportive and characterized bysocio-emotional cohesiveness The attractive-ness of the organization as a place to workand undertake innovative activities is used byGeisler (1995) as an indicator of the climatefor innovation measured by numbers of can-didates applying for positions and the ageprofile of scientists and engineers Keller(1986) offers a slightly different perspectiveon participative safety with the constructlsquogroup cohesivenessrsquo which he operational-izes using an established five-item measure
This review has described a wide variety ofmeasures proposed for organizational cultureand structure Unlike some other aspects ofinnovation management this area has receivedextensive measurement attention HoweverHolbek (1988) argues that innovating organi-zations must adopt contrasting structures andclimates as they move from the initiation tothe implementation stages of innovationChesborough and Teece (1996) and Burns andStalker (1961) argue that there is a relation-ship between organizational design and typeof innovation It is a significant gap in innova-tion measurement that there appears to be nomeasures that adequately capture or articulatethis sense of structural shift
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Portfolio Management
The importance of portfolio management tosuccessful product innovation has recentlyemerged as a key theme in the literature Itis important because of the rapidity at whichresources are consumed in the innovationprocess and the need for these to be managed(Cebon and Newton 1999) The effectivenesswith which an organization manages its RampDportfolio is often a key determinant of itscompetitive advantage (Bard et al 1988) Thefocus of portfolio management is on makingstrategic technological and resource choicesthat govern project selection and the futureshape of the organization (Cooper et al 1999)The problems of allocation of resources evalu-ation selection and termination of projects inachieving the optimal portfolio have beenextensively investigated The models all havethe objective of devising means to allocateresources to projects to obtain the optimalbalance in the product development portfoliothat is arriving at a portfolio that optimizesthe trade-off between returns and risks
The process of selecting innovation projectsrequires evaluation and resource allocationunder uncertain conditions It is argued that asystematic process guided by clear selectioncriteria can help optimize the use of limitedresources and enhance an organizationrsquoscompetitive position (Hall and Nauda 1990)The earliest models used return on investmentas the primary decision criteria (Bard et al 1988)Following this increasingly sophisticatedmathematical tools were developed to resolvewhat Schmidt and Freeland (1992) describe asthe constrained optimization problem that isto maximize the output (according to specifiedcriteria) from a subset of available inputsThese project selection models lsquohave beenvirtually ignored by industryrsquo (Schmidt andFreeland 1992 190) Part of the reason forthis is the inherent complexity of some ofthese models but also that they fail to takeinto account organizational decision andcommunication processes More recentlymodels have tried to take account of these
more qualitative factors involved in decisionprocesses
Scoring models require respondents tospecify the merit of any project proposalaccording to a set of a priori criteria whichmay be objective or subjective (Hall andNauda 1990) Economic and benefit modelsattempt to compute the cost benefit or finan-cial risk of pursuing a specific project whilemathematical programming approaches seekto optimize some objective function(s) subjectto specified resource constraints Algorithmsof varying complexity exist requiring moni-toring and significant data entry and whilemany are conceptually attractive surveys donot show widespread utilization of thesetechniques (Hall and Nauda 1990) Theseapproaches are all based on financial meas-ures such as internal rate of return net presentvalue and return on investment At the otherend of the spectrum qualitative approachessuch as peer review and mental checklistsrely on subjective perceptions and measuresof portfolio balance (Cooper et al 2001Henriksen and Traynor 1999)
Cooper et al (1999) find that best performersuse explicit formalized tools and consist-ently apply them to all projects considered tobelong to a portfolio A series of measures canbe identified that evaluate the whole portfolioof innovation projects to answer questionssuch as lsquois it balanced in terms of quantity ofshort- and long term-projectsrsquo and lsquois there abalance between high and low risk projectsand large and small projectsrsquo (Brenner 1994Cooper et al 2001) Another set seeks to iden-tify the extent to which portfolio evaluationmeasures are formalized within the organiza-tionrsquos processes (Cebon and Newton 1999Chiesa et al 1996 Farrukh et al 2000 Millerand Friesen 1982) Yet another approach is toview project evaluation and selection as anorganizational capability and attempt to deter-mine a level of proficiency (Szakonyi 1994)Finally there is a series of post hoc measuresof the appropriateness of project selections inthe light of results and alignment with busi-ness objectives (Lee et al 1996)
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Innovation management measurement A review
Project Management
Project management is concerned with theprocesses that turn the inputs into a marketa-ble innovation The innovation process iscomplex comprising a myriad of events andactivities some of which can be identified as asequence and some of which occur concur-rently and it is clearly possible that innova-tion processes will differ to some degreeacross organizations and even within organi-zations on a project-by-project basis Havingan efficient process that is able to manage theambiguity of the innovation is universally agreedto be critical to innovation (Globe et al 1973)
Various approaches have been taken tomodelling innovation processes as a series ofevents (Zaltman et al 1973) as a social interac-tion (Voss et al 1999) as a series of transactions(Nelson and Winter 1982) and as a process ofcommunication (Farrukh et al 2000) The his-tory of project management research is partlycharacterized by a debate regarding the extentto which events and activities within the processoccur in linearly sequential discrete identifiablestages (Zaltman et al 1973) or whether eventsare more disorganized (King 1992) or evenchaotic (Koput 1997) However despite thesedifferent viewpoints there are a number ofcommon elements that can be summarized asthe major components of the innovation projectmanagement These are project efficiencytools communications and collaboration
Several studies make efforts to measureproject management efficiency mostly in theform of comparisons between budget and actual(project costs project duration revenue fore-casting) Another measure of project manage-ment success is speed Innovation speed hasbeen positively correlated with product qual-ity or the degree to which it satisfies customerrequirements measures include speed (Hauserand Zettelmeyer 1997) performance againstschedule (Chiesa and Masella 1994) and dura-tion of the process (Cebon and Newton 1999)
To achieve efficiency it is widely recom-mended that organizations seeking to innovateshould establish formal processes for innovat-
ing and make use of tools and techniquesthat may facilitate innovative endeavours Thestage-gate process (Cooper 1990) is possiblythe most familiar of these but other method-ologies for innovation project managementexist including Phased Development Productand Cycle-time Excellence and Total Design(see Jenkins et al (1997) for a discussion)These methodologies have in common theseparation of the product development processinto structured and discrete stages which eachhave milestones in the form of quality controlcheckpoints at which stopgo decisions are madewith regard to the progress of the project Thesehighly structured approaches to the manage-ment of the innovation process began toemerge in the 1990s (Veryzer 1998) The useof structured tools and processes can bemeasured by project process evaluations forexample the use of a formal problem-findingproblem-solving cycle (Bessant 2003) the useof formal post-launch evaluation procedures(Atuahene-Gima 1995) or the use of certifiedprocesses (Chiesa et al 1996) These rathergeneral process measures have been supple-mented by measures of the use of specificinstruments and tools such as interactiveCAD or CAM (Maylor 2001) or the use ofcomputer-integrated manufacturing processes(Parthasarthy and Hammond 2002) but wenote that these measures betray the technologicaland NPD heritage that underpins many of theinnovation measures identified in this reviewEquivalents for service industry public ornot-for-profit sector innovations are somewhatlacking in the literature and constitute aresearch gap
Communications are important in projectmanagement Damanpour (1991) demon-strated the existence of a positive relationshipbetween internal communication and innova-tion Internal communication facilitates thedispersion of ideas within an organizationincreases the diversity and also contributes tothe team lsquoclimatersquo Communication can bemeasured by various integration mechanismseg committees numbers of meetings andcontacts (Damanpour 1991) There are also
copy Blackwell Publishing Ltd 2006 37
March 2006
measures of external communications whichtend to focus on whether communication istaking place the level at which it occurs andwith whom (Cebon and Newton 1999 Leeet al 1996 Rothwell 1992 Souitaris 2002)These measures of internal and external com-munication in the literature are based on bothsubjective evaluations and objective frequencycounts Subjective measures include lsquowe alwaysconsult supplierscustomers on new productideasrsquo (Parthasarthy and Hammond 2002) andlsquodegree of organization members involved andparticipating in extra-organizational professionalactivitiesrsquo (Damanpour 1991) Objective countsinclude (Damanpour 1991) lsquoextent of commu-nication amongst organizational units or groupsmeasured by various integrating mechanismssuch as numbers of committees and frequencyof meetingsrsquo (Anderson and West 1998)lsquofrequency of formal meetings concerningnew ideasrsquo (Souitaris 2002 Szakonyi 1994)lsquohow well do the technical and finance peoplecommunicate with one anotherrsquo
It is widely recognized that collaboratingwith suppliers (Bessant 2003) and customers(von Hippel 1986) can also make a significantcontribution to the innovation processMeasures of collaborative working includethe use of guest engineers (Maylor 2001) thepercentage of projects in co-operation withthird parties (Kerssens-van Drongelen andBilderbeek 1999) and the extent to whichdecision-making at top levels is characterizedby cross-functional discussions (Miller andFriesen 1982) In addition Jassawalla andSashittal (1999) identify some characteristicsof internal collaboration ie that teams arecharacterized by their mindfulness levels ofat-stakeness synergy and transparency butthey do not suggest how these aspects mightbe measured which constitutes a furtherresearch gap
Commercialization
Commercialization can be considered to bethe second of the two phases in Zaltman et alrsquos(1973) conceptualization of the innovation
process that is lsquoimplementationrsquo This canmean taking an innovation to market (Chakra-vorti 2004) but may also include convincingproduction managers to adopt a series of newtechniques available to them (Single andSpurgeon 1996) Indeed the successful intro-duction of new products and services intomarkets is important for the survival andgrowth of organizations Kelm et al (1995)regard commercialization as a transitionalphase in which the organization becomesless reliant on its technological capabilities(important during the activities of initiation)but more dependent on market dynamicsCommercialization is concerned with makingthe innovative process or product a commer-cial success it includes issues such as market-ing sales distribution and joint venturesWhile technical capabilities are important forthe early stages of the innovation process anddevelopment activities for the launch andimplementation stage it is marketing capabili-ties (market investigation market testingpromotion etc) that are significant (Calantoneand di Benedetto 1988 Globe et al 1973)Verhaeghe and Kfir (2002) consider aspectsof commercialization under the headings ofmarket analysis and monitoring reaching thecustomer and market planning
Firm-level measures of the launch or com-mercialization process appear to be relativelythin In their description of the RampD processBalachandra and Brockhoff (1995) character-ize the commercialization stage as requiringlsquobig bucksrsquo market reviews and organiza-tional commitment Most measures appear tobe not much more sophisticated than thisMeasures are frequently restricted to numbersof products launched in a given period (egYoon and Lilien 1985) There is thoughsome focus on market analysis and monitor-ing (Verhaeghe and Kfir 2002) Song andParry (1996) employ a set of measures oflaunch proficiency (salesforce distributionaland promotional support) that directly addressthe lsquoadequacyrsquo of the organizationrsquos facilities inthese areas as do Avlonitis et al (2001) Andthere is a limited mention of the commercial
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Innovation management measurement A review
intentions of an organizationrsquos competitors(Calantone and di Benedetto 1988) Thethemes of proficiency of personnel in this area(eg Atuahene-Gima 1995 Cebon and New-ton 1999) of adherence to a commercializa-tion schedule (eg Griffin and Page 1993) andof formal post-launch reviews (Atuahene-Gima 1995 von Zedtwitz 2002) can also befound in the literature
Even in the work that addresses post-project reviews very little attention is directedtowards measuring innovation launch orcommercialization However this comes aslittle surprise as Hultink et al (2000) recentlyobserved that little work has been done in thearea perhaps because at least in the innova-tion literature launch activities appear to beconsidered the domain of other specialistsparticularly marketers and the process is seenas separate from innovation In their studythey investigated launch decisions associatedwith success for consumer and business-to-business products Much of the literature thatconsiders launch and commercialization doesso from the viewpoint of the adopter andassesses rates of adoption and diffusion ofinnovations over time across populations(Kessler and Chakrabarti 1996 Van DenBulte 2000)
The area of commercialization appears tobe the least developed of the issues involvedin innovation management This is a huge gapbecause without this last step the previoussteps of assembling inputs project manage-ment etc will not result in a commerciallyviable outcome for the firm We believe thatthis area of innovation is in urgent need offurther development from both theory andmeasurement viewpoints
Discussion
Innovation management measurement is acritical discipline for both academics andpractitioners The capacity of organizations toinnovate is determined by multiple factors thatrelate both to their own internal organizationand to their market environment (Rothwell
et al 1974) and the task of generating andthen converting ideas into usable and market-able products requires high levels of inter-functional co-ordination and integration Thispaper opened with the general observationthat innovation measurement does not appearto take place routinely within managementpractice and that where it does it tends tofocus on output measures Further from therelatively small number of empirical studiesof measurement in practice measurement ofinnovation management appears to be under-taken infrequently in an ad hoc fashion andrelies on dated unbalanced or under-specifiedmodels of the innovation management phe-nomenon This suggests that a large part ofthe contemporary conceptualization of theinnovation management phenomenon is over-looked in practitionersrsquo measurement prac-tices and consequently that opportunities forthe more efficient and effective managementof the innovation process are not realizedSome possible reasons for this state of affairsare failure of academics to communicate ade-quately inconsistency inaccessibility andcomplexity of measures and poor synthesisand packaging
Following a review and synthesis of theliterature we proposed a seven-dimensionalconceptualization of the innovation manage-ment phenomenon and applied it to an exam-ination of the measurement problem Throughthe application of this framework to their ownparticular context it is suggested that practi-tioners will be able to conduct an evaluationof their own innovation management activityidentify gaps weaknesses or deficiencies andalso improvement potential Further it ishoped that organizations applying the frame-work will be able to tease out areas whereinnovation is only nominally adopted in theirprocesses and identify areas where attentionand resources might be focused
From the perspective of its management itis no longer sufficient to treat innovation as alinear process where resources are channelledat one end from which emerges a new prod-uct or process The measurement framework
copy Blackwell Publishing Ltd 2006 39
March 2006
presented in Table 2 shows the breadth andvariety of elements of innovation managementthat ideally need to be measured There havebeen several studies that have investigated thelimitations of various approaches to measure-ment (eg Werner and Souder 1997) and ofspecific measures (eg Trajtenberg 1990) asthey relate to the practice of innovation Thechoice of an appropriate RampD measurementmetric depends on the userrsquos needs in terms ofcomprehensiveness of measurement type ofRampD being measured available data andamount of effort the user can afford to allocateto the exercise Nonetheless the commonciting across various papers of the measuresnoted in the innovation management frame-work presented here suggests that a base setof innovation management measures isimplicitly present in the literature eventhough they may be fragmented in appearanceand presentation By pulling together theinnovation management framework fromdiverse sources this paper aims to bring suchissues into the open and identify relevantresearch gaps Table 2 can be viewed as thebasis for a balanced scorecard (Kaplan andNorton 1992) for innovation managementthat is as a balanced set of areas that need tobe measured in order to gain insight into anorganizationrsquos holistic ability to manage inno-vation Such multidimensional approaches tomeasurement have been found in other areasof management to be an improvement on sim-ple one-dimensional measures and to be ableto capture both short- and long-term aspectsof value creation in the firm (Phelps 2004)
We have identified a large number of meas-ures and approaches in a variety of innovationmanagement areas and we have constructed ageneric set of innovation management meas-urement areas to act as a framework for bal-anced measurement However in several ofthese areas measurement gaps have beenidentified These gaps are of two types valid-ity gaps and omission gaps Validity gaps arisewhere there is insufficient evidence that pro-posed measures actually do capture drivers oroutputs of innovation management for example
we have noted the objections to counts ofpatents or increasing expenditure on RampD beingused as measures of innovative organizationsSimilarly there is an absence of evidence thatthe large number of subjective perceptions ofinnovation management practices proposed(lsquowe do Arsquo lsquowe are good at Brsquo) actually relateto innovation management performance
Omission gaps occur where the importanceof an aspect of innovation management is sup-ported in the literature but measures for thisaspect are lacking Omission gaps are particu-larly prevalent in the elements of innovationmanagement such as knowledge managementinnovation strategy and commercializationthat do not feature strongly in the literature ontechnological and manufacturing-based inno-vation Another area traditionally not givenmuch emphasis in this literature is organiza-tion and culture which fortunately is bettertreated by the organizational behaviour litera-ture where a number of measures have beendeveloped Much of the current state of meas-urement practice can be traced back to the dis-ciplinersquos early manufacturing RampD and NPDfocus While product innovation is undoubt-edly important it is only one dimension of anorganizationrsquos innovation agenda Process andorganizational innovations are recognizedtoo as critical for competitiveness yet theseperspectives are inadequately represented inmeasurement terms
General areas of omission in this fieldrelate to an over-reliance on financial meas-ures rather than process measures for exam-ple the use of financial measures of portfoliooptimization but an absence of portfoliocapability measures a similar reliance oncodified knowledge such as patents to theexclusion of more intangible measures suchas tacit knowledge the measurement of levelsof resources or activities with no indication ofwhat an optimal level would be the measure-ment of drivers of innovation without meas-ures of whether these drivers are aligned witheach other and with firm strategy measures ofpresence that do not measure quality (eg theuse of dichotomous (yesno) measures that do
40 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
not indicate how well an action is implementedand measures of the presence of leadership(such as champions) but not of quality ofleadership) a general absence of measuresfor important properties of organizationalstructures such as flexibility and a lack ofmeasures of the match between structure andenvironment a technological and NPD bias toproject management measures and a relativeabsence of measures for service sectors apaucity of measures for internal communica-tions and a general lack of measures forcommercialization management ndash in particulararound marketing and sales capabilities forinnovative products and services All thesegaps provide the potential for further researchin innovation management measurement
The absence of an accepted framework ofinnovation management measures leads notonly to the gaps identified above but also toother problems in the literature One is that itis frequently unclear whether or not the met-rics used are of the researchersrsquo own devisingdrawn from the literature or are what are usedby the organizations being studied Nor is italways clear when metrics are devised orrecommended whether they are intended foruse in a research capacity or for managementtasks Further the measures proposed in theliterature often seem to be proposed abstractlywith little consideration given to the use ofmeasures as a management tool in the day-to-day context of managing innovation In theabsence of a comprehensive framework forinnovation management measurement organ-izations will inevitably resort to ad hoc andpartial metrics which can encourage wastefulpractice (eg measuring innovation managementcapability according to annual RampD spend)We hope that the framework constructed inthis paper will be useful in the constructionof comprehensive measures of innovationmanagement
Acknowledgements
The research reported here was supported bya grant from Cranfield School of Management
the authors gratefully acknowledge this supportFurther the authors are grateful to the editorsand two anonymous reviewers for their helpfuland insightful comments on previous versionsof this paper
Note
1 Corresponding author Telephone +44 (0) 207594 9137 e-mail radamsimperialacuk
References
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Innovation management measurement A review
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Glaser BG and Strauss AL (1967) The Discoveryof Grounded Theory Strategies for QualitativeResearch London Aldine
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Innovation management measurement A review
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extension Academy of Management Review 27185
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Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
26 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Furthermore they explicitly bounded theirmodel with notions of inputs and commercial-ized outputs
Cormican and OrsquoSullivan (2004 820) reflect-ing earlier studiesrsquo coverage of the organizationof innovation conceive of product innovationas a continuous and cross-functional processlsquoinvolving and integrating a growing numberof different competencies [inside the organiza-tion]rsquo So effective management of the processrequires successful adoption and adaption of asocio-technical systems approach to all aspectsof the organization critically including peopleand process as well as technology-relatedissues
While there are areas of commonalityacross these innovation management modelsno one model covers every dimension Thissuggests a need for a synthetic and integrativeframework to promote comparability and toenable future work to build on results found inprevious studies In column 1 of Table 2 wepresent such a framework derived from asynthesis of the studies presented in the othercolumns of the table The framework consistsof seven categories inputs knowledge manage-ment strategy organization and culture port-folio management project management andcommercialization
In the following sections we use these seveninductively derived categories as the organiz-ing framework for a discussion of innovationmanagement measurement For each of thesecategories we review the diverse literaturerelevant to the measurement of that typologicalcategory Within each category a series of sub-dimensions of measurement focus are identi-fied reflecting the distinctions and emphasesin the literature (see Table 3)
Measures of Innovation Management
Inputs Management
Inputs management is concerned with theresourcing of innovation activities and includesfactors ranging from finance to human andphysical resources to generating new ideas
The construct research and development (RampD)intensity has frequently been used as a globalmeasure of input Typically it is expressed asa ratio between expenditure (eg Parthasarthyand Hammond 2002) or numbers employedin RampD roles (Kivimaumlki et al 2000) and someexpression of output The relationship betweenRampD intensity and firm or innovation per-formance has been empirically demonstratedin several studies (eg Deeds 2001 Greve2003 Parthasarthy and Hammond 2002)However there is some equivocality in the lit-erature Stock et al (2001) note an inverted-Urelationship between RampD intensity and NPDperformance and Bougrain and Haudeville(2002) point out that it does not influence thefuture prospects of a project and is indeed animperfect measure of innovation activityFurther RampD is only one of several inputs intothe innovation process and therefore cannotbe regarded as an adequate proxy it also doesnot appear to be a very useful measure forsmall and medium-sized enterprises (SMEs)which may not have formal RampD activities ormay not record them (Kleinknecht 1987) orindeed for service industries which tend to havelow RampD intensity (Hipp and Grupp 2005)
Table 3 Innovation management measurement areas
Framework category Measurement areas
Inputs People Physical and financial resources Tools
Knowledge management
Idea generation Knowledge repository Information flows
Innovation strategy Strategic orientation Strategic leadership
Organization and culture
Culture Structure
Portfolio management
Riskreturn balance Optimization tool use
Project management Project efficiency Tools Communications Collaboration
Commercialization Market research Market testing Marketing and sales
copy Blackwell Publishing Ltd 2006 27
March 2006
High levels of RampD intensity are thereforenot necessarily evidence of good innovationpractice they may simply mask process inef-ficiencies (Cebon and Newton 1999 Dodgsonand Hinze 2000) However adequate fundingis clearly a critical input into the innovationprocess Expenditure data have long been apopular proxy measure of innovation inputlargely because of their ready availabilitySeveral different approaches both qualitativeand quantitative to measuring funding canbe identified total expenditure expenditureexpressed as a proportion of sales or revenuesand expenditure by item (organizational depart-ment patent innovation or scientist) (Geisler1995 Oliver et al 1999) Also there is aseries of perceptual measures that attempt todetermine the adequacy of funding (Atuahene-Gima 1995) Measures though tend princi-pally to be quantitative and express little otherthan funding level in particular few measuresattempt to determine the adequacy of fundingfor the innovation project Kerssens-vanDrongelen and de Weerd-Nederhof (1999)point to a lack of measurement proceduresto help managers diagnose poor innovationperformance or support improvement
A more helpful measure of inputs maytherefore be obtained by disaggregating inputsinto different types and measuring each inde-pendently before aggregating back to a meas-ure of overall inputs management Brown andSvenson (1988 30) define the inputs into theRampD system as lsquothe raw materials or stimulia system receives and processesrsquo includingpeople equipment facilities and funds Thisfundamental distinction between people toolsand physical and financial resources is widelymirrored in the literature
People factors have been measured as thenumber of people committed to the innovationtask (absolute numbers and relative to totalemployees) in terms of the mix of types ofpeople regarding cosmopolitanism and pro-pensity to innovate and in terms of skillsexperience and education Damanpour (1991)argues that a diversity of skills and experiencepermits more differentiated units from which
collaborative relationships can emerge and addsignificant value to innovation outcomesAlthough Baldridge and Burnham (1975) arguethat demographic characteristics (sex agecosmopolitanism education) do not appearto influence innovative behaviour amongindividuals more recent research suggests thatinnovating groups should comprise individualswith a mix of these characteristics (Amabile1998) Members with high levels of educationand self-esteem increase the effectiveness ofRampD project teams (Kessler and Chakrabarti1996) and individuals of greater educationalattainment with diverse backgrounds havebeen associated with more innovative teams(Bantel and Jackson 1989)
The propensity of an individual to innovatehas received considerable attention though itis difficult to measure Kirton (1976) devel-oped a 32-item questionnaire designed toestablish an individualrsquos position on anlsquoadaptorndashinnovatorrsquo continuum Scott andBruce (1994) operationalized an lsquoinnovativebehaviour measurersquo consisting of six itemsagainst which subordinates are measured byhierarchical superiors Finally the InnovationPotential Indicator (Patterson 2003) providesa framework for investigating individualbehaviours that might promote or inhibitinnovation in the workplace This measureis constructed around four dimensions anindividualrsquos motivation to change challeng-ing behaviour preferred approach to workand preference for tried and trustedmethods of work as opposed to doing thingsdifferently
Facilities or physical resources is a broadcategory that captures a range of inputs frombuildings to computer equipment Physicalresources can be counted or measured indollar terms However one important generalmeasure of facilities which cannot be so read-ily measured is slack Slack resources orunused capacity can be regarded as an import-ant catalyst for innovation Slack allowsfailures to be absorbed provides the opportu-nity for diversification and fosters a cultureof experimentation and protects against the
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Innovation management measurement A review
uncertainty of project failure (Kimberly 1981)An alternative view however suggests a nega-tive relationship slack can become synonymouswith waste and represents a cost that should beeliminated (Nohria and Gulati 1996) Typicallyfinancial measures of slack are used (Daman-pour 1991) although Miller and Friesen (1982)use both financial and human measures ofslack
Use of systems and tools is an importantinput to the innovation process (Bessant andFrancis 1997 Cooper et al 2004) Measuresidentified tend to relate to whether or not theorganization has or makes use of formal sys-tems and tools in support of innovation Thesecan be of various sorts such as the availabilityand use of tools and techniques for promotingcreativity (Amabile 1998 Rickards 1991Rochford 1991 Thompson 2003) or the avail-ability and use of systems of quality controlranging from informal methods to specifictechniques such as total quality management(TQM) (Souitaris 2002) While tool use canbe evaluated on a binary or degree of use scalethere is little other than Chiesa et alrsquos (1996)technical innovation audit that attempts tomeasure whether or not tool use is consistentwith a firmrsquos innovation requirements and isintegrated into its processes
We conclude that while there has been aconcentration on financial measurement ofinputs there is less emphasis on measuringother aspects of the category Even withinfinancial measures there are few that attemptto determine the adequacy of funding for theinnovation project Further most measuresreflect a preoccupation with RampD and NPDrather than other forms of innovation (egprocess business model) In particular thesofter inputs of skills and knowledge arepoorly represented by measurement instru-ments Tacit knowledge input appears not tobe well captured by extant measures and nomeasures of appropriate skill levels have beendeveloped This is an imbalance that needsto be addressed by further work to developa balanced set of measures covering allsub-dimensions of the input category
Knowledge Management
Knowledge absorption an organizationrsquosability to identify acquire and utilize externalknowledge can be critical to a firmrsquos success-ful operation (Zahra and George 2002) Theconcept of knowledge has received muchattention in recent years (eg Blackler 1995McAdam 1999 Nonaka 1991) and has beenasserted to play a critical role in the innova-tion process (Hull et al 2000) Knowledgemanagement is concerned with obtainingand communicating ideas and informationthat underlie innovation competencies andincludes idea generation absorptive capacityand networking Knowledge managementcovers the management of explicit andimplicit knowledge held by the organization(Davis 1998 Nonaka 1991) as well as theprocesses of gathering and using informa-tion The three areas within knowledgemanagement of importance for innovationmanagement identified in the literatureare idea generation knowledge repository(including the management of implicitand explicit knowledge) and informationflows (including information gathering andnetworking)
The importance of generating sufficientnumbers of ideas has been well established inthe literature Ideas are the raw materials forinnovation it is relatively inexpensive togenerate and screen ideas yet this can havesignificant impact on ultimate success orfailure (Cooper 1988) Several authors haveconceptualized the early stages of the innova-tion process as a somewhat fuzzy period(Kim and Wilemon 2002 Moenaert et al1995 Verworn 2002) including opportunityidentification opportunity analysis idea gen-esis idea selection and concept development(Koen et al 2001)
At the commencement of the innovationprocess when ideas are generated andexplored measures tend mostly to be quanti-tative inexpensive and rapid As the processprogresses and uncertainties with regard toappropriateness feasibility and business case
copy Blackwell Publishing Ltd 2006 29
March 2006
are reduced measurement approaches becomeincreasingly qualitative and possibly morecostly and time-consuming to deploy Meas-ures imply an assumption that the objective isto generate as many ideas as possible throughthe use of generative tools Several measuresattempt to count the number of ideas gener-ated in a period (cf Chiesa et al 1996 Leeet al 1996) while others probe the extent towhich organizations are using different gener-ative tools and techniques (cf Cebon andNewton 1999 Chiesa et al 1996 Loch et al1996 Rochford 1991 Szakonyi 1994Thompson 2003)
If knowledge is fundamental to innovationthen it should be possible to measure theaccumulated knowledge of the firm itsknowledge repository One aspect of innova-tion relates to combinations of new andexisting knowledge which privileges the con-tribution of internal and external knowledgeand the mechanisms by which it flows intoand within an organization (Galunic andRodan 1998 Nonaka and Takeuchi 1995 Pittand Clarke 1999) Central to this perspectiveis the idea of lsquoabsorptive capacityrsquo the firmrsquosability to absorb and put to use new knowledgeand involving lsquoan ability to recognize thevalue of new external knowledge assimilateit and apply it to commercial endsrsquo (Cohenand Levinthal 1990 128) Absorptive capacityresults from a prolonged process of invest-ment and knowledge accumulation within thefirm and its development is path dependentFirms with strong absorptive capabilities aremore likely to acquire knowledge and learneffectively from outside Higher levels ofabsorptive capacity appear to be positivelyrelated to innovation and performance (Chen2004 Tsai 2001) but it is impossible topredict what is the lsquorightrsquo level of investmentin absorptive capacity for any individualfirm (Cohen and Levinthal 1990) meaningthat it is not readily amenable to interna-tional benchmarking However the conceptualdevelopment and empirical studies infer orimply a range of organizational knowledgestates
Several quantitative approaches have beendeveloped for the measurement of importedtangible knowledge The most frequently usedapproach counts numbers or value of patentsbrought in However this restricts its applica-tion to contexts in which patents are signifi-cant and overlooks those industries wherethey do not feature For a while patent datawas widely accepted as a proxy measure forinnovation More recently however the valid-ity of patent statistics has been questionedpatents vary in their utility for organizationsand so their input value to the innovation can-not adequately be judged in terms of a cashprice (Griliches 1990 Pakes and Griliches1980) Only a few studies have attempted todevise measures for other contexts For exam-ple Kleinknecht (1987) constructed a ques-tion designed to capture the informal hours ofRampD work that are hypothesized to be hiddenwithin other activities or to take place outsideformal working hours
Patents represent codified knowledge butthe importance of tacit knowledge to organi-zational innovation is underscored in theresource-based approach (Barney 1991 Galu-nic and Rodan 1998 Grant 1991 Leonardand Sensiper 1998) Tacit knowledge is animportant resource when it is has value for theorganization is difficult for competitors toimitate is rare and can be operationalized bythe organization Of particular importance isits acquisition and use (Bess 1998) It can beacquired opportunistically or by a deliberatepolicy of search
Tacit knowledge is notoriously difficult tomeasure in organizational research andmethodologies for its investigation andmeasurement can be complex Ambrosiniand Bowman (2001) for example proposean approach that consists of causal mappingfacilitated by story-telling and the use of meta-phor Other attempts to capture tacit know-ledge and group memory have been reportedby Oliver et al (1999) At the level of theorganization Sveiby (1997) suggests thedifference between market value and netbook value as an indicator of the value to an
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Innovation management measurement A review
organization of intangible knowledge assetsThe first method is resource intensive whilein the second it is not clear how much of theidentified value can be attributed to inputs intoinnovation Tacit knowledge input appears notto be well captured by extant measures
Information flows into and within the firmare important in sparking ideas and in allow-ing the development of innovative conceptsThree measurement approaches to informa-tion flows can be identified first measures ofthe linkages that the innovating group main-tains with external organizations and sourcessecond measures of internal informationgathering processes Third measures of cus-tomer information contacts
Linkage measures determine whether or notthe organization has and maintains externallinkages with other organizations or sourcesof information eg through participation inresearch projects university links or attend-ance at trade shows (Atuahene-Gima 1995Tipping and Zeffren 1995) These are princi-pally dichotomous measures only infre-quently is there a measure that implies somesort of qualitative assessment of the nature ofthe linkages Cebon and Newtonrsquos (1999)measures suggest that quality and diversity oflinkage might be an important factor forexample visits to exemplary projects
Statistics on the use of formal methods ofinformation gathering such as project reviewsand the use of technical reports (Oliver et al1999) provide a frequently used approach tothe measurement of information gatheringCebon and Newton (1999) suggest bench-marking information gathering against com-petitorsrsquo activities to gauge how well theactivity is performed Another important areaabout which a firm needs understanding andinformation is customers Atuahene-Gima(1995) lists a series of measures specificallyaimed at examining the extent to which organ-izations make use of customers as a source ofinformation and include measures assessingthe adequacy of information and customercontact time (Lee et al 1996 Miller andFriesen 1982)
Innovation Strategy
Ramanujam and Mensch (1985) defineinnovation strategy as a timed sequence ofinternally consistent and conditional resourceallocation decisions that are designed to fulfilan organizationrsquos objectives Activities mustbe consistent with an overarching organiza-tional strategy that implies that managementmust take conscious decisions regardinginnovation goals (Sundbo 1997) Innovationstrategy is generally understood to describe anorganizationrsquos innovation posture with regardto its competitive environment in terms of itsnew product and market development plans(Dyer and Song 1998) This techno-centricview predominates in the literature andoverlooks those innovative initiatives that areinternally focused (for example the adoptionof new management techniques and prac-tices) In the conceptualization of innovationstrategy as an articulation of the organizationrsquoscommitment to the development of productsthat are new to itself andor to its marketsand because strategy does not operate in avacuum but requires a structural context twocomplementary approaches to its measure-ment which have been described as objectiveand subjective (Li and Atuahene-Gima 2001)can be identified
In the literature scholars principally haveadapted measures from strategic managementresearch to explore the existence nature andextent of innovation strategy Richard et al(2003) use three scale items drawn from thestrategic posture scale devised by Covin andSlevin (1989) who in turn draw on Milesand Snowrsquos (1978) lsquoprospectorsrsquo and Mintz-bergrsquos (1978) lsquoentrepreneurialrsquo organizationsfor their assessment of bank innovativenessThese studies classify organizations based ontheir approach to innovation using classifica-tions that are ontologically grounded in theassumption that innovation orientation can bedeciphered from quantitative interpretationsof new product and market activity
Other objective evidence of an organizationrsquosinnovation strategic posture may include many
copy Blackwell Publishing Ltd 2006 31
March 2006
of the input measures (such as level of RampDexpenditure) that we have already discussedIt is argued that it is not their absolute magni-tude but their magnitude relative to industryrivals that is significant As has been notedalthough these may be useful indicators ofcommitment or intent they could mask pro-cess inefficiencies However OrsquoBrienrsquos (2003)observation that an interaction betweenintended strategy and slack will influence per-formance suggests that process inefficienciesare less likely to occur where an innovationstrategy is not merely nominally adopted butis embedded in the culture behaviours andactions of the organization
In Li and Atuahene-Gimarsquos (2001) termsthe evidence for an embedded innovationstrategy is subjective and may include evalua-tions of an organizationrsquos emphasis on NPDsuch as resource allocation Saleh and Wang(1993) describe this as consisting of threemain components risk-taking proactivenessand persistent commitment to innovationThese include top management responsibilityfor innovation within the organization includ-ing specifying and communicating a directionfor innovation Cooper (1984) demonstratedthat new product performance is largelydecided by the strategy that top managementadopts The key components are the linkbetween innovation strategy and overall busi-ness goals (strategic orientation) and theprovision of leadership to make innovationhappen via a strong vision (Pinto and Prescott1988) for innovation a long-term commit-ment to innovation and a clear allocation ofresources (Cooper et al 2004) This distinc-tion between strategic planning or orientationand strategic vision or leadership is frequentlyreplicated in the literature
Two distinct types of strategic orientationmeasures can be identified in the literatureFirst those that measure whether the organi-zation has an innovation strategy this can beevaluated in several ways such as commit-ment to differentiated funding (White 2002)explicit expression (does the organizationhave an innovation strategy) (Miller and
Friesen 1982) and identifiable roles for newproducts and services (Cooper and Klein-schmidt 1990 Geisler 1995 Hauser andZettelmeyer 1997 Tipping and Zeffren 1995)The second type of measure regards strategyas a dynamic instrument that shapes andguides innovation in the organization Thesemeasures assume that strategy exists and asksquestions about how effective it is in shapingand guiding lsquoare structures and systemsalignedrsquo (Bessant 2003) lsquodo innovation goalsmatch strategic objectivesrsquo (Tipping andZeffren 1995) and further similar measures ofstrategic fit (Bessant 2003)
From a strategic leadership perspectiveDougherty and Cohen (1995) found thebehaviour of senior managers to be influentialThose chief executives most likely to makeinnovation happen are those with a clearvision of the future operation and direction oforganizational change and creativity (Shin andMcClomb 1998) Senior management areresponsible for developing and communicat-ing a vision for innovation being supportiveand adopting an attitude tolerant to changeand championing the notion of innovationwithin the organization Managerial toleranceto change creates the right climate for theimplementation stage of innovation whereconflict resolution might be necessary(Damanpour 1991)
Managerial attitude is also reflected innorms or support for innovation These are theexpectation approval and practical support ofattempts to introduce new and improved waysof doing things in the work environmentMeasures are mostly qualitative in nature andexplore perceptions mostly about the extentto which respondents recognize factors to bepresent (or absent)
Relatively few measures of championingand leadership have been uncovered in thisreview other than those that simply ask thequestion whether or not one or other existsperhaps through evidence of signs of commit-ment in annual reports (Chiesa et al 1996) orlevels of concern of top management (Coughlanet al 1994) or whether or not an individual
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has been physically assigned to a particularrole (Souitaris 2002) Shane et al (1995) pro-vide a series of reflective questions designedto allow organizations to determine for them-selves their expectations and understandingof the role of champion For example lsquoto whatextent should the organization make it possiblefor the people working on an innovation tobend the rules of the organization to developthe innovation or be allowed to bypass certainpersonnel procedures to get people committedto an innovationrsquo
It must be emphasized that the dominantperspective on strategy in the literature isone that examines the relationship betweenstrategy and performance However a smallnumber of studies have examined the natureof the transitions of these states as organiza-tions adopt and embed an innovation strategyThis sub-section of the literature is under-pinned by the assumption that firms that fol-low innovation strategies differ from otherfirms in several respects It is apparent thatmore innovative firms adopt different opera-tional strategies to accommodate flexibilityand quality capabilities (Alegre-Vidal et al2004) have different capital managementpractices to facilitate slack resources (OrsquoBrien2003) are more tolerant of internal conflict insupport of creativity (Dyer and Song 1998)and maintain organizational structures that arein the lsquointermediate zone between order anddisorderrsquo (Brown and Eisenhardt 1997 22)What is clear from this literature is that anytransition towards an innovation strategy willnecessarily take several years because of theresources and energy that are necessary beforesuch a transformation can even be triggered(Hope Hailey 2001)
Organizational Culture and Structure
Burns and Stalker (1961) described a contin-gency approach to innovation managementlater developed to include concepts of func-tional differentiation specialization and inte-gration (Lawrence and Lorsch 1967) whichsuggests that environmental change prompts a
realignment of the fit between strategy andstructure That is to perform effectively anorganization must be appropriately differenti-ated specialized and integrated Pugh et al(1969) argued that the structure of an organi-zation is strongly related to the context withinwhich it functions Our closing discussion inthe previous section that the characteristics oforganizations following an innovation-focusedstrategy will differ from those that do not isconsistent with this contingency approach andin the following we focus on those dimen-sions of culture and structure that have beenidentified to differentiate between innovativeand non-innovative organizations
Organizational culture and structure concernthe way staff are grouped and the organiza-tional culture within which they work Therehas been considerable work on the situationaland psychological factors supportive of inno-vation in organizations Indeed it has beenwidely demonstrated that the perceived workenvironment (comprising both structural andcultural elements) does make a difference tothe level of innovation in organizations (Ama-bile et al 1996 Ekvall 1996) Creative andinnovative behaviours appear to be promotedby work environment factors (Mathisen andEinarsen 2004) Indeed it is clear that organ-izations can create environments in whichinnovation can be encouraged or hampered(Dougherty and Cohen 1995 Tidd et al1997) A common theme is that of the poly-chronic organization ndash one with the capacityto be in two states at once (Becker andWhisler 1973) Shepard (1967) describes thisas a two-state organization manoeuvreingbetween loose and tight and Mitroff (1987)as business-as-usual versus business-not-as-usual More prosaically this means organiza-tions need to be able for example to providesufficient freedom to allow for the explorationof creative possibilities but sufficient controlto manage innovation in an effective and effi-cient fashion
Ernst (2002) specifies a range of genericcharacteristics for the dedicated project groupassigned the innovation task multidisciplinarity
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dedicated project leader inter-functional com-munication and co-operation qualificationsand know-how of the project leader teamautonomy and responsibility for the processAnd these factors are echoed throughout theliterature Rothwell (1992) refers to them aslsquocorporate conditionsrsquo Chiesa et al (1996)lsquoenabling processesrsquo and OrsquoReilly and Tushman(1997) lsquonorms for innovation and changersquoHowever despite their perceived importancethere is little guidance on how to measurethem
Volberda (1996) developed a conceptualmodel of alternative flexible organizationalforms that are argued to initiate or respondbetter to different types of competition Yet inspite of its importance there is relatively littleevidence of extant measures of flexibility inthe literature Rothwell (1992) and Ekvall(1996) propose a range of foci for measures oforganizational and production flexibility suchas lsquocorporate flexibility and responsiveness tochangersquo Coughlan (1994) considers the flexi-bility of resource allocation Several measuresof personnel flexibility are evident such aslsquothe adaptiveness of RampD personnel to tech-nology changesrsquo (Lee et al 1996) and lsquothewillingness to try new procedures and toexperiment with change so as to improve asituation or a processrsquo (Abbey and Dickson1983) At the level of the firm Liao et al(2003) introduce a similar construct ndash lsquoorgan-izational responsivenessrsquo
Organizational complexity the amount ofspecialization and task differentiation report-edly have a positive relationship (Damanpour1996) though Wolfe (1994) argues that it mayfavour initiation at the expense of implemen-tation Administrative intensity that is theratio of managers to total employees favoursadministrative innovation (Damanpour 19911996) but possibly at the cost of other pro-duct or technological innovations (Doughertyand Hardy 1996) Centralization the concen-tration of decision-making authority at the topof the organizational hierarchy and formaliza-tion the degree of emphasis on following rulesand procedures in role performance have both
been shown to have a negative impact on organ-izational innovation (Burns and Stalker 1961Damanpour 1991) Indeed rigidity in rulesand procedures may prohibit organizationaldecision-makers from seeking new sources ofinformation (Vyakarnam and Adams 2001)
Underlying the concept of the workplaceenvironment are issues related to the manage-ment of human resources and the creation ofa culture or climate in which individuals per-ceive innovation to be a desired and supportedorganizational objective There has been con-siderable empirical work on organizationalclimates supportive of the innovation processand several measurement instruments havebeen developed which Mathisen and Einarsen(2004) review The Team Climate Inventory(TCI) (Anderson and West 1996 1998) andthe KEYS instrument for assessing the workenvironment for creativity (Amabile et al 1996)have been found to be robust and rigorous
The TCI has been applied and validated inseveral studies (Agrell and Gustafson 1994Anderson and West 1998 Kivimaumlki et al1997 West and Anderson 1996) Replicationstudies using the TCI have found it canexplain a large part of the variance in teamsrsquoinnovative performance (Agrell and Gustafson1994) The TCI is based around four mainfactors participative safety (how participativeis the team in decision-making proceduresand how psychologically secure do teammembers feel about proposing new andimproved ways of doing things) support forinnovation (the degree of practical support forinnovation attempts contrasted with the rheto-ric of professed support by senior manage-ment) vision (how clearly defined sharedattainable and valued are the teamrsquos objectivesand vision) and task orientation (the com-mitment of the team to achieve the highestpossible standards of task performance includ-ing the use of constructive progress monitor-ing procedures) (Anderson and West 1996)Kivimaumlki et al (1997) suggested a fifth factorlsquointeraction frequencyrsquo relating to the regularityof contact and communication within theproject team
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There is general agreement about theimportance of individual and group autonomyin the innovation process (Amabile 1998)Zien and Buckler (1997) emphasize the needfor freedom to experiment and the creation ofsafe havens without which innovation out-come might be constrained Measures ofautonomy mix both qualitative and quantita-tive approaches For example lsquothe degree offreedom personnel have in day-to-day operat-ing decisions such as when to work andhow to solve job problems including freedomfrom constant evaluation and close supervi-sionrsquo (Abbey and Dickson 1983) or lsquopercent-age of RampD portfolio with explicit businessunit andor corporate business managementsign-offrsquo (Tipping and Zeffren 1995) Addition-ally several authors have proposed generalmeasures of autonomy such as lsquofreedom tomake operating decisionsrsquo (Abbey and Dick-son 1983) or lsquodegree of empowermentrsquo (deLeede et al 1999 Tipping and Zeffren1995)
Morale and motivation are dimensions ofthe innovative organization that can be meas-ured as they pertain to individuals ndash lsquotheextent to which personnel are well rewardedrsquo(Abbey and Dickson 1983) to groups ndash lsquoourreward system is more group-based thanindividual-basedrsquo (Parthasarthy and Hammond2002) and to the organization as a whole ndashlsquothe degree to which the organization attemptsto excelrsquo (Abbey and Dickson 1983) Aspectsof morale and motivation that have beenmeasured include trust (Miller and Friesen1982) and job satisfaction which has beenmeasured by Keller (1986) on a 20-item scale
Organizational culture may include a sharedvision and it has been argued that the clearerthe vision the more effective it is as a facilitatorof innovation as it enables focused develop-ment of new ideas that can be assessed moreprecisely (West 1990) Pinto and Prescott(1988) found that the only factor to have pre-dictive power in terms of potential for successat all stages of the innovation process (con-ception planning execution and termination)was having a clearly stated missionvision
while West (1990) contends that the quality ofinnovation is partly a function of visionKeller (1986) adopts Kirtonrsquos (1976) 32-itemadopterndashinnovator inventory to determineindividual and team orientation to innovationVision is operationalized in the team climateinventory (cf Agrell and Gustafson 1994Anderson and West 1996 1998 West andAnderson 1996) and is deconstructed into aseries of sub-dimensions such as clarity shared-ness attainability and value with regard toteam objectives
Another aspect of culture is the propensityto take risks Saleh and Wang (1993) describethis as a willingness to confront risky oppor-tunities and tolerate failure and learn fromdoing so rather than recklessly gamblingSimilarly West (1990) demonstrated thathigher levels of participative safety facilitateinnovation Participative safety is non-judgmental supportive and characterized bysocio-emotional cohesiveness The attractive-ness of the organization as a place to workand undertake innovative activities is used byGeisler (1995) as an indicator of the climatefor innovation measured by numbers of can-didates applying for positions and the ageprofile of scientists and engineers Keller(1986) offers a slightly different perspectiveon participative safety with the constructlsquogroup cohesivenessrsquo which he operational-izes using an established five-item measure
This review has described a wide variety ofmeasures proposed for organizational cultureand structure Unlike some other aspects ofinnovation management this area has receivedextensive measurement attention HoweverHolbek (1988) argues that innovating organi-zations must adopt contrasting structures andclimates as they move from the initiation tothe implementation stages of innovationChesborough and Teece (1996) and Burns andStalker (1961) argue that there is a relation-ship between organizational design and typeof innovation It is a significant gap in innova-tion measurement that there appears to be nomeasures that adequately capture or articulatethis sense of structural shift
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Portfolio Management
The importance of portfolio management tosuccessful product innovation has recentlyemerged as a key theme in the literature Itis important because of the rapidity at whichresources are consumed in the innovationprocess and the need for these to be managed(Cebon and Newton 1999) The effectivenesswith which an organization manages its RampDportfolio is often a key determinant of itscompetitive advantage (Bard et al 1988) Thefocus of portfolio management is on makingstrategic technological and resource choicesthat govern project selection and the futureshape of the organization (Cooper et al 1999)The problems of allocation of resources evalu-ation selection and termination of projects inachieving the optimal portfolio have beenextensively investigated The models all havethe objective of devising means to allocateresources to projects to obtain the optimalbalance in the product development portfoliothat is arriving at a portfolio that optimizesthe trade-off between returns and risks
The process of selecting innovation projectsrequires evaluation and resource allocationunder uncertain conditions It is argued that asystematic process guided by clear selectioncriteria can help optimize the use of limitedresources and enhance an organizationrsquoscompetitive position (Hall and Nauda 1990)The earliest models used return on investmentas the primary decision criteria (Bard et al 1988)Following this increasingly sophisticatedmathematical tools were developed to resolvewhat Schmidt and Freeland (1992) describe asthe constrained optimization problem that isto maximize the output (according to specifiedcriteria) from a subset of available inputsThese project selection models lsquohave beenvirtually ignored by industryrsquo (Schmidt andFreeland 1992 190) Part of the reason forthis is the inherent complexity of some ofthese models but also that they fail to takeinto account organizational decision andcommunication processes More recentlymodels have tried to take account of these
more qualitative factors involved in decisionprocesses
Scoring models require respondents tospecify the merit of any project proposalaccording to a set of a priori criteria whichmay be objective or subjective (Hall andNauda 1990) Economic and benefit modelsattempt to compute the cost benefit or finan-cial risk of pursuing a specific project whilemathematical programming approaches seekto optimize some objective function(s) subjectto specified resource constraints Algorithmsof varying complexity exist requiring moni-toring and significant data entry and whilemany are conceptually attractive surveys donot show widespread utilization of thesetechniques (Hall and Nauda 1990) Theseapproaches are all based on financial meas-ures such as internal rate of return net presentvalue and return on investment At the otherend of the spectrum qualitative approachessuch as peer review and mental checklistsrely on subjective perceptions and measuresof portfolio balance (Cooper et al 2001Henriksen and Traynor 1999)
Cooper et al (1999) find that best performersuse explicit formalized tools and consist-ently apply them to all projects considered tobelong to a portfolio A series of measures canbe identified that evaluate the whole portfolioof innovation projects to answer questionssuch as lsquois it balanced in terms of quantity ofshort- and long term-projectsrsquo and lsquois there abalance between high and low risk projectsand large and small projectsrsquo (Brenner 1994Cooper et al 2001) Another set seeks to iden-tify the extent to which portfolio evaluationmeasures are formalized within the organiza-tionrsquos processes (Cebon and Newton 1999Chiesa et al 1996 Farrukh et al 2000 Millerand Friesen 1982) Yet another approach is toview project evaluation and selection as anorganizational capability and attempt to deter-mine a level of proficiency (Szakonyi 1994)Finally there is a series of post hoc measuresof the appropriateness of project selections inthe light of results and alignment with busi-ness objectives (Lee et al 1996)
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Innovation management measurement A review
Project Management
Project management is concerned with theprocesses that turn the inputs into a marketa-ble innovation The innovation process iscomplex comprising a myriad of events andactivities some of which can be identified as asequence and some of which occur concur-rently and it is clearly possible that innova-tion processes will differ to some degreeacross organizations and even within organi-zations on a project-by-project basis Havingan efficient process that is able to manage theambiguity of the innovation is universally agreedto be critical to innovation (Globe et al 1973)
Various approaches have been taken tomodelling innovation processes as a series ofevents (Zaltman et al 1973) as a social interac-tion (Voss et al 1999) as a series of transactions(Nelson and Winter 1982) and as a process ofcommunication (Farrukh et al 2000) The his-tory of project management research is partlycharacterized by a debate regarding the extentto which events and activities within the processoccur in linearly sequential discrete identifiablestages (Zaltman et al 1973) or whether eventsare more disorganized (King 1992) or evenchaotic (Koput 1997) However despite thesedifferent viewpoints there are a number ofcommon elements that can be summarized asthe major components of the innovation projectmanagement These are project efficiencytools communications and collaboration
Several studies make efforts to measureproject management efficiency mostly in theform of comparisons between budget and actual(project costs project duration revenue fore-casting) Another measure of project manage-ment success is speed Innovation speed hasbeen positively correlated with product qual-ity or the degree to which it satisfies customerrequirements measures include speed (Hauserand Zettelmeyer 1997) performance againstschedule (Chiesa and Masella 1994) and dura-tion of the process (Cebon and Newton 1999)
To achieve efficiency it is widely recom-mended that organizations seeking to innovateshould establish formal processes for innovat-
ing and make use of tools and techniquesthat may facilitate innovative endeavours Thestage-gate process (Cooper 1990) is possiblythe most familiar of these but other method-ologies for innovation project managementexist including Phased Development Productand Cycle-time Excellence and Total Design(see Jenkins et al (1997) for a discussion)These methodologies have in common theseparation of the product development processinto structured and discrete stages which eachhave milestones in the form of quality controlcheckpoints at which stopgo decisions are madewith regard to the progress of the project Thesehighly structured approaches to the manage-ment of the innovation process began toemerge in the 1990s (Veryzer 1998) The useof structured tools and processes can bemeasured by project process evaluations forexample the use of a formal problem-findingproblem-solving cycle (Bessant 2003) the useof formal post-launch evaluation procedures(Atuahene-Gima 1995) or the use of certifiedprocesses (Chiesa et al 1996) These rathergeneral process measures have been supple-mented by measures of the use of specificinstruments and tools such as interactiveCAD or CAM (Maylor 2001) or the use ofcomputer-integrated manufacturing processes(Parthasarthy and Hammond 2002) but wenote that these measures betray the technologicaland NPD heritage that underpins many of theinnovation measures identified in this reviewEquivalents for service industry public ornot-for-profit sector innovations are somewhatlacking in the literature and constitute aresearch gap
Communications are important in projectmanagement Damanpour (1991) demon-strated the existence of a positive relationshipbetween internal communication and innova-tion Internal communication facilitates thedispersion of ideas within an organizationincreases the diversity and also contributes tothe team lsquoclimatersquo Communication can bemeasured by various integration mechanismseg committees numbers of meetings andcontacts (Damanpour 1991) There are also
copy Blackwell Publishing Ltd 2006 37
March 2006
measures of external communications whichtend to focus on whether communication istaking place the level at which it occurs andwith whom (Cebon and Newton 1999 Leeet al 1996 Rothwell 1992 Souitaris 2002)These measures of internal and external com-munication in the literature are based on bothsubjective evaluations and objective frequencycounts Subjective measures include lsquowe alwaysconsult supplierscustomers on new productideasrsquo (Parthasarthy and Hammond 2002) andlsquodegree of organization members involved andparticipating in extra-organizational professionalactivitiesrsquo (Damanpour 1991) Objective countsinclude (Damanpour 1991) lsquoextent of commu-nication amongst organizational units or groupsmeasured by various integrating mechanismssuch as numbers of committees and frequencyof meetingsrsquo (Anderson and West 1998)lsquofrequency of formal meetings concerningnew ideasrsquo (Souitaris 2002 Szakonyi 1994)lsquohow well do the technical and finance peoplecommunicate with one anotherrsquo
It is widely recognized that collaboratingwith suppliers (Bessant 2003) and customers(von Hippel 1986) can also make a significantcontribution to the innovation processMeasures of collaborative working includethe use of guest engineers (Maylor 2001) thepercentage of projects in co-operation withthird parties (Kerssens-van Drongelen andBilderbeek 1999) and the extent to whichdecision-making at top levels is characterizedby cross-functional discussions (Miller andFriesen 1982) In addition Jassawalla andSashittal (1999) identify some characteristicsof internal collaboration ie that teams arecharacterized by their mindfulness levels ofat-stakeness synergy and transparency butthey do not suggest how these aspects mightbe measured which constitutes a furtherresearch gap
Commercialization
Commercialization can be considered to bethe second of the two phases in Zaltman et alrsquos(1973) conceptualization of the innovation
process that is lsquoimplementationrsquo This canmean taking an innovation to market (Chakra-vorti 2004) but may also include convincingproduction managers to adopt a series of newtechniques available to them (Single andSpurgeon 1996) Indeed the successful intro-duction of new products and services intomarkets is important for the survival andgrowth of organizations Kelm et al (1995)regard commercialization as a transitionalphase in which the organization becomesless reliant on its technological capabilities(important during the activities of initiation)but more dependent on market dynamicsCommercialization is concerned with makingthe innovative process or product a commer-cial success it includes issues such as market-ing sales distribution and joint venturesWhile technical capabilities are important forthe early stages of the innovation process anddevelopment activities for the launch andimplementation stage it is marketing capabili-ties (market investigation market testingpromotion etc) that are significant (Calantoneand di Benedetto 1988 Globe et al 1973)Verhaeghe and Kfir (2002) consider aspectsof commercialization under the headings ofmarket analysis and monitoring reaching thecustomer and market planning
Firm-level measures of the launch or com-mercialization process appear to be relativelythin In their description of the RampD processBalachandra and Brockhoff (1995) character-ize the commercialization stage as requiringlsquobig bucksrsquo market reviews and organiza-tional commitment Most measures appear tobe not much more sophisticated than thisMeasures are frequently restricted to numbersof products launched in a given period (egYoon and Lilien 1985) There is thoughsome focus on market analysis and monitor-ing (Verhaeghe and Kfir 2002) Song andParry (1996) employ a set of measures oflaunch proficiency (salesforce distributionaland promotional support) that directly addressthe lsquoadequacyrsquo of the organizationrsquos facilities inthese areas as do Avlonitis et al (2001) Andthere is a limited mention of the commercial
38 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
intentions of an organizationrsquos competitors(Calantone and di Benedetto 1988) Thethemes of proficiency of personnel in this area(eg Atuahene-Gima 1995 Cebon and New-ton 1999) of adherence to a commercializa-tion schedule (eg Griffin and Page 1993) andof formal post-launch reviews (Atuahene-Gima 1995 von Zedtwitz 2002) can also befound in the literature
Even in the work that addresses post-project reviews very little attention is directedtowards measuring innovation launch orcommercialization However this comes aslittle surprise as Hultink et al (2000) recentlyobserved that little work has been done in thearea perhaps because at least in the innova-tion literature launch activities appear to beconsidered the domain of other specialistsparticularly marketers and the process is seenas separate from innovation In their studythey investigated launch decisions associatedwith success for consumer and business-to-business products Much of the literature thatconsiders launch and commercialization doesso from the viewpoint of the adopter andassesses rates of adoption and diffusion ofinnovations over time across populations(Kessler and Chakrabarti 1996 Van DenBulte 2000)
The area of commercialization appears tobe the least developed of the issues involvedin innovation management This is a huge gapbecause without this last step the previoussteps of assembling inputs project manage-ment etc will not result in a commerciallyviable outcome for the firm We believe thatthis area of innovation is in urgent need offurther development from both theory andmeasurement viewpoints
Discussion
Innovation management measurement is acritical discipline for both academics andpractitioners The capacity of organizations toinnovate is determined by multiple factors thatrelate both to their own internal organizationand to their market environment (Rothwell
et al 1974) and the task of generating andthen converting ideas into usable and market-able products requires high levels of inter-functional co-ordination and integration Thispaper opened with the general observationthat innovation measurement does not appearto take place routinely within managementpractice and that where it does it tends tofocus on output measures Further from therelatively small number of empirical studiesof measurement in practice measurement ofinnovation management appears to be under-taken infrequently in an ad hoc fashion andrelies on dated unbalanced or under-specifiedmodels of the innovation management phe-nomenon This suggests that a large part ofthe contemporary conceptualization of theinnovation management phenomenon is over-looked in practitionersrsquo measurement prac-tices and consequently that opportunities forthe more efficient and effective managementof the innovation process are not realizedSome possible reasons for this state of affairsare failure of academics to communicate ade-quately inconsistency inaccessibility andcomplexity of measures and poor synthesisand packaging
Following a review and synthesis of theliterature we proposed a seven-dimensionalconceptualization of the innovation manage-ment phenomenon and applied it to an exam-ination of the measurement problem Throughthe application of this framework to their ownparticular context it is suggested that practi-tioners will be able to conduct an evaluationof their own innovation management activityidentify gaps weaknesses or deficiencies andalso improvement potential Further it ishoped that organizations applying the frame-work will be able to tease out areas whereinnovation is only nominally adopted in theirprocesses and identify areas where attentionand resources might be focused
From the perspective of its management itis no longer sufficient to treat innovation as alinear process where resources are channelledat one end from which emerges a new prod-uct or process The measurement framework
copy Blackwell Publishing Ltd 2006 39
March 2006
presented in Table 2 shows the breadth andvariety of elements of innovation managementthat ideally need to be measured There havebeen several studies that have investigated thelimitations of various approaches to measure-ment (eg Werner and Souder 1997) and ofspecific measures (eg Trajtenberg 1990) asthey relate to the practice of innovation Thechoice of an appropriate RampD measurementmetric depends on the userrsquos needs in terms ofcomprehensiveness of measurement type ofRampD being measured available data andamount of effort the user can afford to allocateto the exercise Nonetheless the commonciting across various papers of the measuresnoted in the innovation management frame-work presented here suggests that a base setof innovation management measures isimplicitly present in the literature eventhough they may be fragmented in appearanceand presentation By pulling together theinnovation management framework fromdiverse sources this paper aims to bring suchissues into the open and identify relevantresearch gaps Table 2 can be viewed as thebasis for a balanced scorecard (Kaplan andNorton 1992) for innovation managementthat is as a balanced set of areas that need tobe measured in order to gain insight into anorganizationrsquos holistic ability to manage inno-vation Such multidimensional approaches tomeasurement have been found in other areasof management to be an improvement on sim-ple one-dimensional measures and to be ableto capture both short- and long-term aspectsof value creation in the firm (Phelps 2004)
We have identified a large number of meas-ures and approaches in a variety of innovationmanagement areas and we have constructed ageneric set of innovation management meas-urement areas to act as a framework for bal-anced measurement However in several ofthese areas measurement gaps have beenidentified These gaps are of two types valid-ity gaps and omission gaps Validity gaps arisewhere there is insufficient evidence that pro-posed measures actually do capture drivers oroutputs of innovation management for example
we have noted the objections to counts ofpatents or increasing expenditure on RampD beingused as measures of innovative organizationsSimilarly there is an absence of evidence thatthe large number of subjective perceptions ofinnovation management practices proposed(lsquowe do Arsquo lsquowe are good at Brsquo) actually relateto innovation management performance
Omission gaps occur where the importanceof an aspect of innovation management is sup-ported in the literature but measures for thisaspect are lacking Omission gaps are particu-larly prevalent in the elements of innovationmanagement such as knowledge managementinnovation strategy and commercializationthat do not feature strongly in the literature ontechnological and manufacturing-based inno-vation Another area traditionally not givenmuch emphasis in this literature is organiza-tion and culture which fortunately is bettertreated by the organizational behaviour litera-ture where a number of measures have beendeveloped Much of the current state of meas-urement practice can be traced back to the dis-ciplinersquos early manufacturing RampD and NPDfocus While product innovation is undoubt-edly important it is only one dimension of anorganizationrsquos innovation agenda Process andorganizational innovations are recognizedtoo as critical for competitiveness yet theseperspectives are inadequately represented inmeasurement terms
General areas of omission in this fieldrelate to an over-reliance on financial meas-ures rather than process measures for exam-ple the use of financial measures of portfoliooptimization but an absence of portfoliocapability measures a similar reliance oncodified knowledge such as patents to theexclusion of more intangible measures suchas tacit knowledge the measurement of levelsof resources or activities with no indication ofwhat an optimal level would be the measure-ment of drivers of innovation without meas-ures of whether these drivers are aligned witheach other and with firm strategy measures ofpresence that do not measure quality (eg theuse of dichotomous (yesno) measures that do
40 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
not indicate how well an action is implementedand measures of the presence of leadership(such as champions) but not of quality ofleadership) a general absence of measuresfor important properties of organizationalstructures such as flexibility and a lack ofmeasures of the match between structure andenvironment a technological and NPD bias toproject management measures and a relativeabsence of measures for service sectors apaucity of measures for internal communica-tions and a general lack of measures forcommercialization management ndash in particulararound marketing and sales capabilities forinnovative products and services All thesegaps provide the potential for further researchin innovation management measurement
The absence of an accepted framework ofinnovation management measures leads notonly to the gaps identified above but also toother problems in the literature One is that itis frequently unclear whether or not the met-rics used are of the researchersrsquo own devisingdrawn from the literature or are what are usedby the organizations being studied Nor is italways clear when metrics are devised orrecommended whether they are intended foruse in a research capacity or for managementtasks Further the measures proposed in theliterature often seem to be proposed abstractlywith little consideration given to the use ofmeasures as a management tool in the day-to-day context of managing innovation In theabsence of a comprehensive framework forinnovation management measurement organ-izations will inevitably resort to ad hoc andpartial metrics which can encourage wastefulpractice (eg measuring innovation managementcapability according to annual RampD spend)We hope that the framework constructed inthis paper will be useful in the constructionof comprehensive measures of innovationmanagement
Acknowledgements
The research reported here was supported bya grant from Cranfield School of Management
the authors gratefully acknowledge this supportFurther the authors are grateful to the editorsand two anonymous reviewers for their helpfuland insightful comments on previous versionsof this paper
Note
1 Corresponding author Telephone +44 (0) 207594 9137 e-mail radamsimperialacuk
References
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Ambrosini V and Bowman C (2001) Tacit know-ledge some suggestions for operationalisationJournal of Management Studies 38 811ndash829
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Atuahene-Gima K (1995) An exploratory analysisof the input of market orientation on new productperformance a contingency approach Journal ofProduct Innovation Management 12 275ndash293
Avlonitis GJ Papastathopoulou PG and Gounaris SP(2001) An empirically-based typology of productinnovativeness for new financial services success
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March 2006
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Burns TR and Stalker GM (1961) The Manage-ment of Innovation London Tavistock
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Chiesa V Coughlan P and Voss A (1996) Devel-opment of a technical innovation audit Journal ofProduct Innovation Management 13 105ndash136
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Cooper RG (1979b) Identifying industrial newproduct success Project NewProd Industrial Mar-keting Management 8 124ndash135
Cooper RG (1984) The strategyndashperformance linkin product innovation RampD Management 14 247ndash259
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Innovation management measurement A review
Cooper RG (1990) Stage-gate systems a new toolfor managing new products Business Horizons 3344ndash56
Cooper RG and Kleinschmidt EJ (1990) Newproduct success factors a comparison of lsquokillsrsquoversus successes and failures RampD Management20 47ndash64
Cooper RG and Kleinschmidt EJ (1995) Bench-marking the firmrsquos critical success factors in newproduct development Journal of Product Innova-tion Management 12 374ndash391
Cooper RG Edgett SJ and Kleinschmidt EJ(1999) New product portfolio management prac-tices and performance Journal of Product Innova-tion Management 16 333ndash351
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Cooper RG Edgett SJ and Kleinschmidt EJ (2004)Benchmarking best NPD practices Research-Technology Management 47 50ndash59
Cordero R (1990) The measurement of innovationperformance in the firm an overview ResearchPolicy 19 185ndash192
Cormican K and OrsquoSullivan D (2004) Auditingbest practice for effective product innovationmanagement Technovation 24 819ndash829
Coughlan P Chiesa V and Voss C (1994) Evalu-ating leadership as an enabler of innovation InProceedings 2nd International Product Develop-ment Management Conference GothenburgSweden 30ndash31 May Brussels European Institutefor Advanced Studies in Management
Covin JG and Slevin DP (1989) Strategic manage-ment of small firms in hostile and benign environ-ments Strategic Management Journal 10 75ndash87
Daft R (1978) A dual-core model of organizationalinnovation Academy of Management Journal 21193ndash210
Damanpour F (1991) Organizational innovation ameta-analysis of effects of determinants and mod-erators Academy of Management Journal 34 555ndash590
Damanpour F (1996) Organizational complexity andinnovation developing and testing multiple contin-gency models Management Science 42 693ndash716
Davis MC (1998) Knowledge management Infor-mation Strategy The Executiversquos Journal 15 11ndash22
De Brentani U (1991) Success factors in developingnew business services European Journal of Mar-keting 25 33ndash60
De Leede J Nijhof AH and Fisscher OA (1999)The myth of self managing teams a reflection onthe allocation of responsibilities between individu-als teams and the organisation Journal of BusinessEthics 21 203ndash215
Deeds DL (2001) The role of RampD intensitytechnical development and absorptive capacity increating entrepreneurial wealth in high technologystart-ups Journal of Engineering and TechnologyManagement 18 29ndash47
Denyer D and Neely A (2004) Introduction to spe-cial issue innovation and productivity performancein the UK International Journal of ManagementReviews 45 131ndash135
Di Benedetto CA (1996) Identifying the key suc-cess factors in new product launch Journal ofProduct Innovation Management 16 530ndash544
Dodgson M and Hinze S (2000) Indicators used tomeasure the innovation process defects and possi-ble remedies Research Evaluation 8 101ndash114
Dougherty D and Cohen M (1995) Product inno-vation in mature firms In Bowman E and KogutB (eds) Redesigning the Firm New York OxfordUniversity Press
Dougherty D and Hardy C (1996) Sustained prod-uct innovation in large mature organizations over-coming innovation-to-organization problemsAcademy of Management Journal 39 1120ndash1153
DTI (1998) An Audience With Innovation Innovationin Management London Department of Trade andIndustry
Dyer B and Song XM (1998) Innovation strategyand sanctioned conflict a new edge in innovationJournal of Product Innovation Management 15505ndash519
Ekvall G (1996) Organizational climate for creativ-ity and innovation European Journal of Work andOrganizational Psychology 5 105ndash123
Ernst H (2002) Success factors of new productdevelopment a review of the empirical literatureInternational Journal of Management Reviews 41ndash40
Farrukh C Phaal R Probert D Gregory M andWright J (2000) Developing a process for therelative valuation of RampD programmes RampDManagement 30 43ndash53
Frenkel A Maital S and Grupp H (2000) Meas-uring dynamic technical change a technometricapproach International Journal of TechnologyManagement 20 429ndash441
Galunic DC and Rodan S (1998) Resource recom-binations and the firm knowledge structures and
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the potential for Schumpeterian innovationStrategic Management Journal 19 1193ndash1201
Geisler E (1995) An integrated costndashperformancemodel of research-and-development evaluationOmega ndash International Journal of ManagementScience 23 281ndash294
Glaser BG and Strauss AL (1967) The Discoveryof Grounded Theory Strategies for QualitativeResearch London Aldine
Globe S Levy GW and Schwartz CM (1973)Key factors and events in the innovation processResearch Management 16 8ndash15
Goffin K and Pfeiffer R (1999) Innovation Man-agement in UK and German Manufacturing Com-panies London Anglo-German Foundation for theStudy of Industrial Society
Grant RM (1991) The resource-based theory ofcompetitive advantage implications for strategyformulation California Management Review 33114ndash135
Greve HR (2003) A behavioral theory of RampDexpenditures and innovations evidence fromshipbuilding Academy of Management Journal 46685ndash702
Griffin A (1997) PDMA research on new productdevelopment practices updating trends and bench-marking best practices Journal of Product Innova-tion Management 14 429ndash458
Griffin A and Page AL (1993) An interim reporton measuring product development success andfailure Journal of Product Innovation Manage-ment 10 291ndash308
Griliches Z (1990) Patent statistics as economicindicators a survey Journal of Economic Litera-ture 28 1661ndash1707
Hall DL and Nauda A (1990) An interactiveapproach for selecting IRampD projects IEEE Trans-actions on Engineering Management 37 126ndash133
Hauser JR and Zettelmeyer F (1997) Metrics toevaluate RDampE Research-Technology Manage-ment 40 32ndash38
Henriksen AD and Traynor AJ (1999) A practicalRampD project-selection scoring tool IEEE Trans-actions on Engineering Management 46 158ndash170
Hipp C and Grupp H (2005) Innovation in theservice sector the demand for service specific-innovation measurement concepts and typologiesResearch Policy 34 517ndash535
Holbek J (1988) The innovation design dilemmasome notes on its relevance and solutions InGroslashnhaug K and Kaufmann G (eds) Innovation
A Cross-Disciplinary Perspective NorwegianUniversity Press pp 253ndash277
Hope Hailey V (2001) Breaking the mould Innova-tion as a strategy for corporate renewal Inter-national Journal of Human Resource Management12 1126ndash1140
Hull R Coombs R and Peltu M (2000) Know-ledge management practices for innovation anaudit tool for improvement International Journalof Technology Management 20 633ndash656
Hultink EJ Hart S Robben HSJ and Griffin A(2000) Launch decisions and new product successan empirical comparison of consumer and indus-trial products Journal of Product Innovation Man-agement 17 5ndash23
Jassawalla AR and Sashittal HC (1999) Buildingcollaborative cross-functional new product teamsAcademy of Management Executive 13 50ndash63
Jenkins S Forbes S Durrani TS and BanerjeeSK (1997) Managing the product developmentprocess 1 An assessment International Journal ofTechnology Management 13 359ndash378
Kaplan RS and Norton DP (1992) The balancedscorecard ndash measures that drive performance HarvardBusiness Review JanuaryndashFebruary 71ndash79
Keller RT (1986) Predictors of performance ofproject groups in RampD organizations Academy ofManagement Journal 29 715ndash726
Kelm KM Narayanan VK and Pinches GE (1995)Shareholder value creation during research-and-development innovation and commercialization stagesAcademy of Management Journal 38 770ndash786
Kerssens-van Drongelen IC and Bilderbeek J(1999) RampD performance measurement morethan choosing a set of metrics RampD Management29 35ndash46
Kerssens-van Drongelen IC and de Weerd-Nederhof PC (1999) The use of performancemeasurement tools for balancing short- and long-term NPD performance International Journal ofInnovation Management 3 397ndash426
Kessler EH and Chakrabarti AK (1996) Innova-tion speed a conceptual model of context anteced-ents and outcomes Academy of ManagementReview 21 1143ndash1191
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Kimberly JR (1981) Managerial innovation InNystrom PC and Starbuck WH (eds) Handbookof Organizational Design Vol 1 New YorkOxford University Press pp 84ndash104
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Kirton MJ (1976) Adaptors and innovators adescription and measure Journal of Applied Psy-chology 61 622ndash629
Kivimaumlki M Kuk G Elovainio M Thomson LKalliomaumlki-Levanto T and Heikkilauml A (1997)The team climate inventory (TCI) ndash four or fivefactors Testing the structure of TCI in samples oflow and high complexity jobs Journal of Occupa-tional and Organizational Psychology 70 375ndash389
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Kleinknecht A (1987) Measuring RampD in smallfirms how much are we missing Journal of Indus-trial Economics 36 253ndash256
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Nohria N and Gulati R (1996) Is slack good or badfor innovation Academy of Management Journal39 1245ndash1264
Nonaka I (1991) The knowledge-creating companyHarvard Business Review NovemberndashDecember96ndash104
Nonaka I and Takeuchi H (1995) The KnowledgeCreating Company How Japanese CompaniesCreate the Dynamics of Innovation New YorkOxford University Press
OrsquoBrien JP (2003) The capital structure implica-tions of pursuing a strategy of innovation StrategicManagement Journal 24 415ndash431
OrsquoReilly CA and Tushman ML (1997) Using cul-ture for strategic advantage promoting innovationthrough social control In Tushman ML andAnderson P (eds) Managing Strategic Innovationand Change A Collection of Readings New YorkOxford University Press pp 200ndash216
Oliver N Dewberry E and Dostaler I (1999) Newproduct development performance and practice aninternational benchmarking study in the consumerelectronics industry In Proceedings 6th Inter-national Product Development Management Confer-ence Cambridge UK Brussels European Institutefor Advanced Studies in Management
Pakes A and Griliches Z (1980) Patents and RampDat the firm level a first report Economic Letters 5377ndash381
Parthasarthy R and Hammond J (2002) Productinnovation input and outcome moderating effectsof the innovation process Journal of Engineeringand Technology Management 19 75ndash91
Patterson F (2003) Innovation potential indicatorAvailable at wwwoppcouk
Phelps B (2004) Smart Business Metrics MeasureWhat Really Counts and Manage What Makes theDifference London FT-Prentice Hall
Pinto JK and Prescott JE (1988) Changes in crit-ical success factors over the stages in the projectlife cycle Journal of Management 14 5ndash18
Pitt M and Clarke K (1999) Competing on compe-tence a knowledge perspective on the managementof strategic innovation Technology Analysis andStrategic Management 11 301ndash316
Pittaway L Robertson M Munir K Denyer D andNeely A (2004) Networking and Innovation in theUK a Systematic Review of the Literature LondonAdvanced Institute of Management Research
Porter ME and Ketels CHM (2003) UK Compet-itiveness Moving to the Next Stage DTI Econom-ics Paper No 3 URN 03899
Pugh DS Hickson DJ Hinings CR and TurnerC (1969) The context of organization structuresAdministrative Science Quarterly 14 91ndash114
Ramanujam V and Mensch GO (1985) Improvingthe strategyndashinnovation link Journal of ProductInnovation Management 2 213ndash223
Richard O McMillan A Chadwick K and DwyerS (2003) Employing an innovation strategy inracially diverse workforces ndash effects on firm per-formance Group amp Organization Management 28107ndash126
Rickards T (1991) Innovation and creativity treesand pathways RampD Management 21 97ndash108
Rochford L (1991) Generating and screening newproduct ideas Industrial Marketing Management20 287ndash296
Rothwell R (1992) Successful industrial innovationcritical factors for the 1990s RampD Management22 221ndash239
Rothwell R Freeman C Horseley A JervisVTP Robertson AB and Townsend J (1974)SAPPHO updated ndash Project SAPPHO phase IIResearch Policy 3 258ndash291
Saleh SD and Wang CK (1993) The managementof innovation ndash strategy structure and organiza-tional climate IEEE Transactions on EngineeringManagement 40 14ndash21
Schmidt RL and Freeland JR (1992) Recentprogress in modelling RampD project-selection proc-esses IEEE Transactions on Engineering Manage-ment 39 189ndash201
Schroeder RG Van de Ven AH Scudder GDand Polley D (1989) The development of innova-tion ideas In Van de Ven AH Angle HL andPoole M (eds) Research on the Management ofInnovation The Minnesota Studies New YorkHarper amp Row pp 107ndash133
Scott S and Bruce R (1994) Determinants ofinnovative behaviour a path model of individualinnovation Academy of Management Journal 37580ndash607
Shane S Venkataraman S and MacMillan I (1995)Cultural differences in innovation championingstrategies Journal of Management 21 931ndash952
Shepard HA (1967) Innovation-resisting and inno-vation producing organizations Journal of Busi-ness 40 470ndash477
Shin J and McClomb GE (1998) Top executiveleadership and organizational innovation an
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Innovation management measurement A review
empirical investigation of nonprofit human serviceorganizations (HSOS) Administration in SocialWork 22 1ndash21
Single AW and Spurgeon WM (1996) Creatingand commercializing innovation inside a skunkworks Research-Technology Management 39 38ndash41
Song XM and Parry ME (1996) What separatesJapanese new product winners from losersJournal of Product Innovation Management 13422ndash439
Souitaris V (2002) Firm-specific competenciesdetermining technological innovation a survey inGreece RampD Management 32 61ndash77
Stock GN Greis NP and Fischer WA (2001)Absorptive capacity and new product developmentJournal of High Technology ManagementResearch 12 77ndash91
Sundbo J (1997) Management of innovation inservices Service Industries Journal 17 432ndash455
Sveiby KE (1997) The New Organizational WealthManaging and Measuring Knowledge-BasedAssets San Francisco CA Berrett-Koehler
Szakonyi R (1994) Measuring RampD effectiveness IResearch-Technology Management 37 27ndash32
Thompson L (2003) Improving the creativity oforganizational work groups Academy of Manage-ment Executive 17 96ndash109
Tidd J Bessant J and Pavitt K (1997) ManagingInnovation Integrating Technological Market andOrganizational Change Chichester UK JohnWiley
Tipping J and Zeffren E (1995) Assessing thevalue of your technology ResearchndashTechnologyManagement 38 22ndash40
Trajtenberg M (1990) A penny for your quotes ndashpatent citations and the value of innovations RandJournal of Economics 21 172ndash187
Tranfield D Denyer D and Smart P (2003)Towards a methodology for developing evidence-informed management knowledge by means of asystematic review British Journal of Management14 207ndash222
Tsai W (2001) Knowledge transfer in intraorganiza-tional networks effects of network position andabsorptive capacity on business unit innovation andperformance Academy of Management Journal44 996ndash1004
Van Den Bulte C (2000) New product diffusionacceleration measurement and analysis MarketingScience 19 366ndash380
Verhaeghe A and Kfir R (2002) Managing innovationin a knowledge intensive technology organisation(KITO) RampD Management 32 409ndash417
Verworn B (2002) The fuzzy front end of productdevelopment an exploratory study In Proceedings9th International Product Development ManagementConference Sophia Antipolis France pp 863ndash878Brussels European Institute for Advanced Studiesin Management
Veryzer RW (1998) Discontinuous innovation andthe new product development process Journal ofProduct Innovation Management 15 304ndash321
Volberda HW (1996) Towards the flexible formhow to remain vital in hypercompetitive environ-ments Organizational Science 7 359ndash374
Von Hippel E (1986) Lead users a source of novelproduct concepts Management Science 32 791ndash805
Von Zedtwitz M (2002) Organizational learningthrough post-project reviews in RampD RampD Man-agement 32 255ndash268
Voss C Chase R and Roth A (1999) Internationalservice study Decision Line May 4ndash7
Vyakarnam S and Adams RJ (2001) Institutionalbarriers to enterprise support an empirical studyEnvironment and Planning C Government andPolicy 19 335ndash353
Werner BM and Souder WE (1997) MeasuringRampD performance ndash state of the art Research-Technology Management 40 34ndash42
West MA (1990) The social psychology of innova-tion in groups In West MA and Farr JL (eds)Innovation and Creativity at Work Psychologicaland Organizational Strategies Chichester UKJohn Wiley pp 309ndash333
West MA and Anderson NR (1996) Innovation intop management teams Journal of Applied Psychol-ogy 81 680ndash693
White A (2002) Enabling factors in the front end ofthe innovation process In Proceedings 9thInternational Product Development ManagementConference Sophia Antipolis France BrusselsEuropean Institute for Advanced Studies inManagement pp 879ndash887
Wolfe RA (1994) Organizational innovationreview critique and suggested research direc-tions Journal of Management Studies 31 405ndash431
Yoon E and Lilien GL (1985) A new productlaunch-time decision model Journal of ProductInnovation Management 3 134ndash144
Zahra SA and George G (2002) Absorptivecapacity a review reconceptualization and
copy Blackwell Publishing Ltd 2006 47
March 2006
extension Academy of Management Review 27185
Zaltman G Duncan R and Holbek J (1973) Inno-vations and Organizations New York John Wiley
Zien KA and Buckler SA (1997) From experiencedreams to market crafting a culture of innovationJournal of Product Innovation Management 14274ndash287
Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
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March 2006
High levels of RampD intensity are thereforenot necessarily evidence of good innovationpractice they may simply mask process inef-ficiencies (Cebon and Newton 1999 Dodgsonand Hinze 2000) However adequate fundingis clearly a critical input into the innovationprocess Expenditure data have long been apopular proxy measure of innovation inputlargely because of their ready availabilitySeveral different approaches both qualitativeand quantitative to measuring funding canbe identified total expenditure expenditureexpressed as a proportion of sales or revenuesand expenditure by item (organizational depart-ment patent innovation or scientist) (Geisler1995 Oliver et al 1999) Also there is aseries of perceptual measures that attempt todetermine the adequacy of funding (Atuahene-Gima 1995) Measures though tend princi-pally to be quantitative and express little otherthan funding level in particular few measuresattempt to determine the adequacy of fundingfor the innovation project Kerssens-vanDrongelen and de Weerd-Nederhof (1999)point to a lack of measurement proceduresto help managers diagnose poor innovationperformance or support improvement
A more helpful measure of inputs maytherefore be obtained by disaggregating inputsinto different types and measuring each inde-pendently before aggregating back to a meas-ure of overall inputs management Brown andSvenson (1988 30) define the inputs into theRampD system as lsquothe raw materials or stimulia system receives and processesrsquo includingpeople equipment facilities and funds Thisfundamental distinction between people toolsand physical and financial resources is widelymirrored in the literature
People factors have been measured as thenumber of people committed to the innovationtask (absolute numbers and relative to totalemployees) in terms of the mix of types ofpeople regarding cosmopolitanism and pro-pensity to innovate and in terms of skillsexperience and education Damanpour (1991)argues that a diversity of skills and experiencepermits more differentiated units from which
collaborative relationships can emerge and addsignificant value to innovation outcomesAlthough Baldridge and Burnham (1975) arguethat demographic characteristics (sex agecosmopolitanism education) do not appearto influence innovative behaviour amongindividuals more recent research suggests thatinnovating groups should comprise individualswith a mix of these characteristics (Amabile1998) Members with high levels of educationand self-esteem increase the effectiveness ofRampD project teams (Kessler and Chakrabarti1996) and individuals of greater educationalattainment with diverse backgrounds havebeen associated with more innovative teams(Bantel and Jackson 1989)
The propensity of an individual to innovatehas received considerable attention though itis difficult to measure Kirton (1976) devel-oped a 32-item questionnaire designed toestablish an individualrsquos position on anlsquoadaptorndashinnovatorrsquo continuum Scott andBruce (1994) operationalized an lsquoinnovativebehaviour measurersquo consisting of six itemsagainst which subordinates are measured byhierarchical superiors Finally the InnovationPotential Indicator (Patterson 2003) providesa framework for investigating individualbehaviours that might promote or inhibitinnovation in the workplace This measureis constructed around four dimensions anindividualrsquos motivation to change challeng-ing behaviour preferred approach to workand preference for tried and trustedmethods of work as opposed to doing thingsdifferently
Facilities or physical resources is a broadcategory that captures a range of inputs frombuildings to computer equipment Physicalresources can be counted or measured indollar terms However one important generalmeasure of facilities which cannot be so read-ily measured is slack Slack resources orunused capacity can be regarded as an import-ant catalyst for innovation Slack allowsfailures to be absorbed provides the opportu-nity for diversification and fosters a cultureof experimentation and protects against the
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Innovation management measurement A review
uncertainty of project failure (Kimberly 1981)An alternative view however suggests a nega-tive relationship slack can become synonymouswith waste and represents a cost that should beeliminated (Nohria and Gulati 1996) Typicallyfinancial measures of slack are used (Daman-pour 1991) although Miller and Friesen (1982)use both financial and human measures ofslack
Use of systems and tools is an importantinput to the innovation process (Bessant andFrancis 1997 Cooper et al 2004) Measuresidentified tend to relate to whether or not theorganization has or makes use of formal sys-tems and tools in support of innovation Thesecan be of various sorts such as the availabilityand use of tools and techniques for promotingcreativity (Amabile 1998 Rickards 1991Rochford 1991 Thompson 2003) or the avail-ability and use of systems of quality controlranging from informal methods to specifictechniques such as total quality management(TQM) (Souitaris 2002) While tool use canbe evaluated on a binary or degree of use scalethere is little other than Chiesa et alrsquos (1996)technical innovation audit that attempts tomeasure whether or not tool use is consistentwith a firmrsquos innovation requirements and isintegrated into its processes
We conclude that while there has been aconcentration on financial measurement ofinputs there is less emphasis on measuringother aspects of the category Even withinfinancial measures there are few that attemptto determine the adequacy of funding for theinnovation project Further most measuresreflect a preoccupation with RampD and NPDrather than other forms of innovation (egprocess business model) In particular thesofter inputs of skills and knowledge arepoorly represented by measurement instru-ments Tacit knowledge input appears not tobe well captured by extant measures and nomeasures of appropriate skill levels have beendeveloped This is an imbalance that needsto be addressed by further work to developa balanced set of measures covering allsub-dimensions of the input category
Knowledge Management
Knowledge absorption an organizationrsquosability to identify acquire and utilize externalknowledge can be critical to a firmrsquos success-ful operation (Zahra and George 2002) Theconcept of knowledge has received muchattention in recent years (eg Blackler 1995McAdam 1999 Nonaka 1991) and has beenasserted to play a critical role in the innova-tion process (Hull et al 2000) Knowledgemanagement is concerned with obtainingand communicating ideas and informationthat underlie innovation competencies andincludes idea generation absorptive capacityand networking Knowledge managementcovers the management of explicit andimplicit knowledge held by the organization(Davis 1998 Nonaka 1991) as well as theprocesses of gathering and using informa-tion The three areas within knowledgemanagement of importance for innovationmanagement identified in the literatureare idea generation knowledge repository(including the management of implicitand explicit knowledge) and informationflows (including information gathering andnetworking)
The importance of generating sufficientnumbers of ideas has been well established inthe literature Ideas are the raw materials forinnovation it is relatively inexpensive togenerate and screen ideas yet this can havesignificant impact on ultimate success orfailure (Cooper 1988) Several authors haveconceptualized the early stages of the innova-tion process as a somewhat fuzzy period(Kim and Wilemon 2002 Moenaert et al1995 Verworn 2002) including opportunityidentification opportunity analysis idea gen-esis idea selection and concept development(Koen et al 2001)
At the commencement of the innovationprocess when ideas are generated andexplored measures tend mostly to be quanti-tative inexpensive and rapid As the processprogresses and uncertainties with regard toappropriateness feasibility and business case
copy Blackwell Publishing Ltd 2006 29
March 2006
are reduced measurement approaches becomeincreasingly qualitative and possibly morecostly and time-consuming to deploy Meas-ures imply an assumption that the objective isto generate as many ideas as possible throughthe use of generative tools Several measuresattempt to count the number of ideas gener-ated in a period (cf Chiesa et al 1996 Leeet al 1996) while others probe the extent towhich organizations are using different gener-ative tools and techniques (cf Cebon andNewton 1999 Chiesa et al 1996 Loch et al1996 Rochford 1991 Szakonyi 1994Thompson 2003)
If knowledge is fundamental to innovationthen it should be possible to measure theaccumulated knowledge of the firm itsknowledge repository One aspect of innova-tion relates to combinations of new andexisting knowledge which privileges the con-tribution of internal and external knowledgeand the mechanisms by which it flows intoand within an organization (Galunic andRodan 1998 Nonaka and Takeuchi 1995 Pittand Clarke 1999) Central to this perspectiveis the idea of lsquoabsorptive capacityrsquo the firmrsquosability to absorb and put to use new knowledgeand involving lsquoan ability to recognize thevalue of new external knowledge assimilateit and apply it to commercial endsrsquo (Cohenand Levinthal 1990 128) Absorptive capacityresults from a prolonged process of invest-ment and knowledge accumulation within thefirm and its development is path dependentFirms with strong absorptive capabilities aremore likely to acquire knowledge and learneffectively from outside Higher levels ofabsorptive capacity appear to be positivelyrelated to innovation and performance (Chen2004 Tsai 2001) but it is impossible topredict what is the lsquorightrsquo level of investmentin absorptive capacity for any individualfirm (Cohen and Levinthal 1990) meaningthat it is not readily amenable to interna-tional benchmarking However the conceptualdevelopment and empirical studies infer orimply a range of organizational knowledgestates
Several quantitative approaches have beendeveloped for the measurement of importedtangible knowledge The most frequently usedapproach counts numbers or value of patentsbrought in However this restricts its applica-tion to contexts in which patents are signifi-cant and overlooks those industries wherethey do not feature For a while patent datawas widely accepted as a proxy measure forinnovation More recently however the valid-ity of patent statistics has been questionedpatents vary in their utility for organizationsand so their input value to the innovation can-not adequately be judged in terms of a cashprice (Griliches 1990 Pakes and Griliches1980) Only a few studies have attempted todevise measures for other contexts For exam-ple Kleinknecht (1987) constructed a ques-tion designed to capture the informal hours ofRampD work that are hypothesized to be hiddenwithin other activities or to take place outsideformal working hours
Patents represent codified knowledge butthe importance of tacit knowledge to organi-zational innovation is underscored in theresource-based approach (Barney 1991 Galu-nic and Rodan 1998 Grant 1991 Leonardand Sensiper 1998) Tacit knowledge is animportant resource when it is has value for theorganization is difficult for competitors toimitate is rare and can be operationalized bythe organization Of particular importance isits acquisition and use (Bess 1998) It can beacquired opportunistically or by a deliberatepolicy of search
Tacit knowledge is notoriously difficult tomeasure in organizational research andmethodologies for its investigation andmeasurement can be complex Ambrosiniand Bowman (2001) for example proposean approach that consists of causal mappingfacilitated by story-telling and the use of meta-phor Other attempts to capture tacit know-ledge and group memory have been reportedby Oliver et al (1999) At the level of theorganization Sveiby (1997) suggests thedifference between market value and netbook value as an indicator of the value to an
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Innovation management measurement A review
organization of intangible knowledge assetsThe first method is resource intensive whilein the second it is not clear how much of theidentified value can be attributed to inputs intoinnovation Tacit knowledge input appears notto be well captured by extant measures
Information flows into and within the firmare important in sparking ideas and in allow-ing the development of innovative conceptsThree measurement approaches to informa-tion flows can be identified first measures ofthe linkages that the innovating group main-tains with external organizations and sourcessecond measures of internal informationgathering processes Third measures of cus-tomer information contacts
Linkage measures determine whether or notthe organization has and maintains externallinkages with other organizations or sourcesof information eg through participation inresearch projects university links or attend-ance at trade shows (Atuahene-Gima 1995Tipping and Zeffren 1995) These are princi-pally dichotomous measures only infre-quently is there a measure that implies somesort of qualitative assessment of the nature ofthe linkages Cebon and Newtonrsquos (1999)measures suggest that quality and diversity oflinkage might be an important factor forexample visits to exemplary projects
Statistics on the use of formal methods ofinformation gathering such as project reviewsand the use of technical reports (Oliver et al1999) provide a frequently used approach tothe measurement of information gatheringCebon and Newton (1999) suggest bench-marking information gathering against com-petitorsrsquo activities to gauge how well theactivity is performed Another important areaabout which a firm needs understanding andinformation is customers Atuahene-Gima(1995) lists a series of measures specificallyaimed at examining the extent to which organ-izations make use of customers as a source ofinformation and include measures assessingthe adequacy of information and customercontact time (Lee et al 1996 Miller andFriesen 1982)
Innovation Strategy
Ramanujam and Mensch (1985) defineinnovation strategy as a timed sequence ofinternally consistent and conditional resourceallocation decisions that are designed to fulfilan organizationrsquos objectives Activities mustbe consistent with an overarching organiza-tional strategy that implies that managementmust take conscious decisions regardinginnovation goals (Sundbo 1997) Innovationstrategy is generally understood to describe anorganizationrsquos innovation posture with regardto its competitive environment in terms of itsnew product and market development plans(Dyer and Song 1998) This techno-centricview predominates in the literature andoverlooks those innovative initiatives that areinternally focused (for example the adoptionof new management techniques and prac-tices) In the conceptualization of innovationstrategy as an articulation of the organizationrsquoscommitment to the development of productsthat are new to itself andor to its marketsand because strategy does not operate in avacuum but requires a structural context twocomplementary approaches to its measure-ment which have been described as objectiveand subjective (Li and Atuahene-Gima 2001)can be identified
In the literature scholars principally haveadapted measures from strategic managementresearch to explore the existence nature andextent of innovation strategy Richard et al(2003) use three scale items drawn from thestrategic posture scale devised by Covin andSlevin (1989) who in turn draw on Milesand Snowrsquos (1978) lsquoprospectorsrsquo and Mintz-bergrsquos (1978) lsquoentrepreneurialrsquo organizationsfor their assessment of bank innovativenessThese studies classify organizations based ontheir approach to innovation using classifica-tions that are ontologically grounded in theassumption that innovation orientation can bedeciphered from quantitative interpretationsof new product and market activity
Other objective evidence of an organizationrsquosinnovation strategic posture may include many
copy Blackwell Publishing Ltd 2006 31
March 2006
of the input measures (such as level of RampDexpenditure) that we have already discussedIt is argued that it is not their absolute magni-tude but their magnitude relative to industryrivals that is significant As has been notedalthough these may be useful indicators ofcommitment or intent they could mask pro-cess inefficiencies However OrsquoBrienrsquos (2003)observation that an interaction betweenintended strategy and slack will influence per-formance suggests that process inefficienciesare less likely to occur where an innovationstrategy is not merely nominally adopted butis embedded in the culture behaviours andactions of the organization
In Li and Atuahene-Gimarsquos (2001) termsthe evidence for an embedded innovationstrategy is subjective and may include evalua-tions of an organizationrsquos emphasis on NPDsuch as resource allocation Saleh and Wang(1993) describe this as consisting of threemain components risk-taking proactivenessand persistent commitment to innovationThese include top management responsibilityfor innovation within the organization includ-ing specifying and communicating a directionfor innovation Cooper (1984) demonstratedthat new product performance is largelydecided by the strategy that top managementadopts The key components are the linkbetween innovation strategy and overall busi-ness goals (strategic orientation) and theprovision of leadership to make innovationhappen via a strong vision (Pinto and Prescott1988) for innovation a long-term commit-ment to innovation and a clear allocation ofresources (Cooper et al 2004) This distinc-tion between strategic planning or orientationand strategic vision or leadership is frequentlyreplicated in the literature
Two distinct types of strategic orientationmeasures can be identified in the literatureFirst those that measure whether the organi-zation has an innovation strategy this can beevaluated in several ways such as commit-ment to differentiated funding (White 2002)explicit expression (does the organizationhave an innovation strategy) (Miller and
Friesen 1982) and identifiable roles for newproducts and services (Cooper and Klein-schmidt 1990 Geisler 1995 Hauser andZettelmeyer 1997 Tipping and Zeffren 1995)The second type of measure regards strategyas a dynamic instrument that shapes andguides innovation in the organization Thesemeasures assume that strategy exists and asksquestions about how effective it is in shapingand guiding lsquoare structures and systemsalignedrsquo (Bessant 2003) lsquodo innovation goalsmatch strategic objectivesrsquo (Tipping andZeffren 1995) and further similar measures ofstrategic fit (Bessant 2003)
From a strategic leadership perspectiveDougherty and Cohen (1995) found thebehaviour of senior managers to be influentialThose chief executives most likely to makeinnovation happen are those with a clearvision of the future operation and direction oforganizational change and creativity (Shin andMcClomb 1998) Senior management areresponsible for developing and communicat-ing a vision for innovation being supportiveand adopting an attitude tolerant to changeand championing the notion of innovationwithin the organization Managerial toleranceto change creates the right climate for theimplementation stage of innovation whereconflict resolution might be necessary(Damanpour 1991)
Managerial attitude is also reflected innorms or support for innovation These are theexpectation approval and practical support ofattempts to introduce new and improved waysof doing things in the work environmentMeasures are mostly qualitative in nature andexplore perceptions mostly about the extentto which respondents recognize factors to bepresent (or absent)
Relatively few measures of championingand leadership have been uncovered in thisreview other than those that simply ask thequestion whether or not one or other existsperhaps through evidence of signs of commit-ment in annual reports (Chiesa et al 1996) orlevels of concern of top management (Coughlanet al 1994) or whether or not an individual
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Innovation management measurement A review
has been physically assigned to a particularrole (Souitaris 2002) Shane et al (1995) pro-vide a series of reflective questions designedto allow organizations to determine for them-selves their expectations and understandingof the role of champion For example lsquoto whatextent should the organization make it possiblefor the people working on an innovation tobend the rules of the organization to developthe innovation or be allowed to bypass certainpersonnel procedures to get people committedto an innovationrsquo
It must be emphasized that the dominantperspective on strategy in the literature isone that examines the relationship betweenstrategy and performance However a smallnumber of studies have examined the natureof the transitions of these states as organiza-tions adopt and embed an innovation strategyThis sub-section of the literature is under-pinned by the assumption that firms that fol-low innovation strategies differ from otherfirms in several respects It is apparent thatmore innovative firms adopt different opera-tional strategies to accommodate flexibilityand quality capabilities (Alegre-Vidal et al2004) have different capital managementpractices to facilitate slack resources (OrsquoBrien2003) are more tolerant of internal conflict insupport of creativity (Dyer and Song 1998)and maintain organizational structures that arein the lsquointermediate zone between order anddisorderrsquo (Brown and Eisenhardt 1997 22)What is clear from this literature is that anytransition towards an innovation strategy willnecessarily take several years because of theresources and energy that are necessary beforesuch a transformation can even be triggered(Hope Hailey 2001)
Organizational Culture and Structure
Burns and Stalker (1961) described a contin-gency approach to innovation managementlater developed to include concepts of func-tional differentiation specialization and inte-gration (Lawrence and Lorsch 1967) whichsuggests that environmental change prompts a
realignment of the fit between strategy andstructure That is to perform effectively anorganization must be appropriately differenti-ated specialized and integrated Pugh et al(1969) argued that the structure of an organi-zation is strongly related to the context withinwhich it functions Our closing discussion inthe previous section that the characteristics oforganizations following an innovation-focusedstrategy will differ from those that do not isconsistent with this contingency approach andin the following we focus on those dimen-sions of culture and structure that have beenidentified to differentiate between innovativeand non-innovative organizations
Organizational culture and structure concernthe way staff are grouped and the organiza-tional culture within which they work Therehas been considerable work on the situationaland psychological factors supportive of inno-vation in organizations Indeed it has beenwidely demonstrated that the perceived workenvironment (comprising both structural andcultural elements) does make a difference tothe level of innovation in organizations (Ama-bile et al 1996 Ekvall 1996) Creative andinnovative behaviours appear to be promotedby work environment factors (Mathisen andEinarsen 2004) Indeed it is clear that organ-izations can create environments in whichinnovation can be encouraged or hampered(Dougherty and Cohen 1995 Tidd et al1997) A common theme is that of the poly-chronic organization ndash one with the capacityto be in two states at once (Becker andWhisler 1973) Shepard (1967) describes thisas a two-state organization manoeuvreingbetween loose and tight and Mitroff (1987)as business-as-usual versus business-not-as-usual More prosaically this means organiza-tions need to be able for example to providesufficient freedom to allow for the explorationof creative possibilities but sufficient controlto manage innovation in an effective and effi-cient fashion
Ernst (2002) specifies a range of genericcharacteristics for the dedicated project groupassigned the innovation task multidisciplinarity
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dedicated project leader inter-functional com-munication and co-operation qualificationsand know-how of the project leader teamautonomy and responsibility for the processAnd these factors are echoed throughout theliterature Rothwell (1992) refers to them aslsquocorporate conditionsrsquo Chiesa et al (1996)lsquoenabling processesrsquo and OrsquoReilly and Tushman(1997) lsquonorms for innovation and changersquoHowever despite their perceived importancethere is little guidance on how to measurethem
Volberda (1996) developed a conceptualmodel of alternative flexible organizationalforms that are argued to initiate or respondbetter to different types of competition Yet inspite of its importance there is relatively littleevidence of extant measures of flexibility inthe literature Rothwell (1992) and Ekvall(1996) propose a range of foci for measures oforganizational and production flexibility suchas lsquocorporate flexibility and responsiveness tochangersquo Coughlan (1994) considers the flexi-bility of resource allocation Several measuresof personnel flexibility are evident such aslsquothe adaptiveness of RampD personnel to tech-nology changesrsquo (Lee et al 1996) and lsquothewillingness to try new procedures and toexperiment with change so as to improve asituation or a processrsquo (Abbey and Dickson1983) At the level of the firm Liao et al(2003) introduce a similar construct ndash lsquoorgan-izational responsivenessrsquo
Organizational complexity the amount ofspecialization and task differentiation report-edly have a positive relationship (Damanpour1996) though Wolfe (1994) argues that it mayfavour initiation at the expense of implemen-tation Administrative intensity that is theratio of managers to total employees favoursadministrative innovation (Damanpour 19911996) but possibly at the cost of other pro-duct or technological innovations (Doughertyand Hardy 1996) Centralization the concen-tration of decision-making authority at the topof the organizational hierarchy and formaliza-tion the degree of emphasis on following rulesand procedures in role performance have both
been shown to have a negative impact on organ-izational innovation (Burns and Stalker 1961Damanpour 1991) Indeed rigidity in rulesand procedures may prohibit organizationaldecision-makers from seeking new sources ofinformation (Vyakarnam and Adams 2001)
Underlying the concept of the workplaceenvironment are issues related to the manage-ment of human resources and the creation ofa culture or climate in which individuals per-ceive innovation to be a desired and supportedorganizational objective There has been con-siderable empirical work on organizationalclimates supportive of the innovation processand several measurement instruments havebeen developed which Mathisen and Einarsen(2004) review The Team Climate Inventory(TCI) (Anderson and West 1996 1998) andthe KEYS instrument for assessing the workenvironment for creativity (Amabile et al 1996)have been found to be robust and rigorous
The TCI has been applied and validated inseveral studies (Agrell and Gustafson 1994Anderson and West 1998 Kivimaumlki et al1997 West and Anderson 1996) Replicationstudies using the TCI have found it canexplain a large part of the variance in teamsrsquoinnovative performance (Agrell and Gustafson1994) The TCI is based around four mainfactors participative safety (how participativeis the team in decision-making proceduresand how psychologically secure do teammembers feel about proposing new andimproved ways of doing things) support forinnovation (the degree of practical support forinnovation attempts contrasted with the rheto-ric of professed support by senior manage-ment) vision (how clearly defined sharedattainable and valued are the teamrsquos objectivesand vision) and task orientation (the com-mitment of the team to achieve the highestpossible standards of task performance includ-ing the use of constructive progress monitor-ing procedures) (Anderson and West 1996)Kivimaumlki et al (1997) suggested a fifth factorlsquointeraction frequencyrsquo relating to the regularityof contact and communication within theproject team
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Innovation management measurement A review
There is general agreement about theimportance of individual and group autonomyin the innovation process (Amabile 1998)Zien and Buckler (1997) emphasize the needfor freedom to experiment and the creation ofsafe havens without which innovation out-come might be constrained Measures ofautonomy mix both qualitative and quantita-tive approaches For example lsquothe degree offreedom personnel have in day-to-day operat-ing decisions such as when to work andhow to solve job problems including freedomfrom constant evaluation and close supervi-sionrsquo (Abbey and Dickson 1983) or lsquopercent-age of RampD portfolio with explicit businessunit andor corporate business managementsign-offrsquo (Tipping and Zeffren 1995) Addition-ally several authors have proposed generalmeasures of autonomy such as lsquofreedom tomake operating decisionsrsquo (Abbey and Dick-son 1983) or lsquodegree of empowermentrsquo (deLeede et al 1999 Tipping and Zeffren1995)
Morale and motivation are dimensions ofthe innovative organization that can be meas-ured as they pertain to individuals ndash lsquotheextent to which personnel are well rewardedrsquo(Abbey and Dickson 1983) to groups ndash lsquoourreward system is more group-based thanindividual-basedrsquo (Parthasarthy and Hammond2002) and to the organization as a whole ndashlsquothe degree to which the organization attemptsto excelrsquo (Abbey and Dickson 1983) Aspectsof morale and motivation that have beenmeasured include trust (Miller and Friesen1982) and job satisfaction which has beenmeasured by Keller (1986) on a 20-item scale
Organizational culture may include a sharedvision and it has been argued that the clearerthe vision the more effective it is as a facilitatorof innovation as it enables focused develop-ment of new ideas that can be assessed moreprecisely (West 1990) Pinto and Prescott(1988) found that the only factor to have pre-dictive power in terms of potential for successat all stages of the innovation process (con-ception planning execution and termination)was having a clearly stated missionvision
while West (1990) contends that the quality ofinnovation is partly a function of visionKeller (1986) adopts Kirtonrsquos (1976) 32-itemadopterndashinnovator inventory to determineindividual and team orientation to innovationVision is operationalized in the team climateinventory (cf Agrell and Gustafson 1994Anderson and West 1996 1998 West andAnderson 1996) and is deconstructed into aseries of sub-dimensions such as clarity shared-ness attainability and value with regard toteam objectives
Another aspect of culture is the propensityto take risks Saleh and Wang (1993) describethis as a willingness to confront risky oppor-tunities and tolerate failure and learn fromdoing so rather than recklessly gamblingSimilarly West (1990) demonstrated thathigher levels of participative safety facilitateinnovation Participative safety is non-judgmental supportive and characterized bysocio-emotional cohesiveness The attractive-ness of the organization as a place to workand undertake innovative activities is used byGeisler (1995) as an indicator of the climatefor innovation measured by numbers of can-didates applying for positions and the ageprofile of scientists and engineers Keller(1986) offers a slightly different perspectiveon participative safety with the constructlsquogroup cohesivenessrsquo which he operational-izes using an established five-item measure
This review has described a wide variety ofmeasures proposed for organizational cultureand structure Unlike some other aspects ofinnovation management this area has receivedextensive measurement attention HoweverHolbek (1988) argues that innovating organi-zations must adopt contrasting structures andclimates as they move from the initiation tothe implementation stages of innovationChesborough and Teece (1996) and Burns andStalker (1961) argue that there is a relation-ship between organizational design and typeof innovation It is a significant gap in innova-tion measurement that there appears to be nomeasures that adequately capture or articulatethis sense of structural shift
copy Blackwell Publishing Ltd 2006 35
March 2006
Portfolio Management
The importance of portfolio management tosuccessful product innovation has recentlyemerged as a key theme in the literature Itis important because of the rapidity at whichresources are consumed in the innovationprocess and the need for these to be managed(Cebon and Newton 1999) The effectivenesswith which an organization manages its RampDportfolio is often a key determinant of itscompetitive advantage (Bard et al 1988) Thefocus of portfolio management is on makingstrategic technological and resource choicesthat govern project selection and the futureshape of the organization (Cooper et al 1999)The problems of allocation of resources evalu-ation selection and termination of projects inachieving the optimal portfolio have beenextensively investigated The models all havethe objective of devising means to allocateresources to projects to obtain the optimalbalance in the product development portfoliothat is arriving at a portfolio that optimizesthe trade-off between returns and risks
The process of selecting innovation projectsrequires evaluation and resource allocationunder uncertain conditions It is argued that asystematic process guided by clear selectioncriteria can help optimize the use of limitedresources and enhance an organizationrsquoscompetitive position (Hall and Nauda 1990)The earliest models used return on investmentas the primary decision criteria (Bard et al 1988)Following this increasingly sophisticatedmathematical tools were developed to resolvewhat Schmidt and Freeland (1992) describe asthe constrained optimization problem that isto maximize the output (according to specifiedcriteria) from a subset of available inputsThese project selection models lsquohave beenvirtually ignored by industryrsquo (Schmidt andFreeland 1992 190) Part of the reason forthis is the inherent complexity of some ofthese models but also that they fail to takeinto account organizational decision andcommunication processes More recentlymodels have tried to take account of these
more qualitative factors involved in decisionprocesses
Scoring models require respondents tospecify the merit of any project proposalaccording to a set of a priori criteria whichmay be objective or subjective (Hall andNauda 1990) Economic and benefit modelsattempt to compute the cost benefit or finan-cial risk of pursuing a specific project whilemathematical programming approaches seekto optimize some objective function(s) subjectto specified resource constraints Algorithmsof varying complexity exist requiring moni-toring and significant data entry and whilemany are conceptually attractive surveys donot show widespread utilization of thesetechniques (Hall and Nauda 1990) Theseapproaches are all based on financial meas-ures such as internal rate of return net presentvalue and return on investment At the otherend of the spectrum qualitative approachessuch as peer review and mental checklistsrely on subjective perceptions and measuresof portfolio balance (Cooper et al 2001Henriksen and Traynor 1999)
Cooper et al (1999) find that best performersuse explicit formalized tools and consist-ently apply them to all projects considered tobelong to a portfolio A series of measures canbe identified that evaluate the whole portfolioof innovation projects to answer questionssuch as lsquois it balanced in terms of quantity ofshort- and long term-projectsrsquo and lsquois there abalance between high and low risk projectsand large and small projectsrsquo (Brenner 1994Cooper et al 2001) Another set seeks to iden-tify the extent to which portfolio evaluationmeasures are formalized within the organiza-tionrsquos processes (Cebon and Newton 1999Chiesa et al 1996 Farrukh et al 2000 Millerand Friesen 1982) Yet another approach is toview project evaluation and selection as anorganizational capability and attempt to deter-mine a level of proficiency (Szakonyi 1994)Finally there is a series of post hoc measuresof the appropriateness of project selections inthe light of results and alignment with busi-ness objectives (Lee et al 1996)
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Innovation management measurement A review
Project Management
Project management is concerned with theprocesses that turn the inputs into a marketa-ble innovation The innovation process iscomplex comprising a myriad of events andactivities some of which can be identified as asequence and some of which occur concur-rently and it is clearly possible that innova-tion processes will differ to some degreeacross organizations and even within organi-zations on a project-by-project basis Havingan efficient process that is able to manage theambiguity of the innovation is universally agreedto be critical to innovation (Globe et al 1973)
Various approaches have been taken tomodelling innovation processes as a series ofevents (Zaltman et al 1973) as a social interac-tion (Voss et al 1999) as a series of transactions(Nelson and Winter 1982) and as a process ofcommunication (Farrukh et al 2000) The his-tory of project management research is partlycharacterized by a debate regarding the extentto which events and activities within the processoccur in linearly sequential discrete identifiablestages (Zaltman et al 1973) or whether eventsare more disorganized (King 1992) or evenchaotic (Koput 1997) However despite thesedifferent viewpoints there are a number ofcommon elements that can be summarized asthe major components of the innovation projectmanagement These are project efficiencytools communications and collaboration
Several studies make efforts to measureproject management efficiency mostly in theform of comparisons between budget and actual(project costs project duration revenue fore-casting) Another measure of project manage-ment success is speed Innovation speed hasbeen positively correlated with product qual-ity or the degree to which it satisfies customerrequirements measures include speed (Hauserand Zettelmeyer 1997) performance againstschedule (Chiesa and Masella 1994) and dura-tion of the process (Cebon and Newton 1999)
To achieve efficiency it is widely recom-mended that organizations seeking to innovateshould establish formal processes for innovat-
ing and make use of tools and techniquesthat may facilitate innovative endeavours Thestage-gate process (Cooper 1990) is possiblythe most familiar of these but other method-ologies for innovation project managementexist including Phased Development Productand Cycle-time Excellence and Total Design(see Jenkins et al (1997) for a discussion)These methodologies have in common theseparation of the product development processinto structured and discrete stages which eachhave milestones in the form of quality controlcheckpoints at which stopgo decisions are madewith regard to the progress of the project Thesehighly structured approaches to the manage-ment of the innovation process began toemerge in the 1990s (Veryzer 1998) The useof structured tools and processes can bemeasured by project process evaluations forexample the use of a formal problem-findingproblem-solving cycle (Bessant 2003) the useof formal post-launch evaluation procedures(Atuahene-Gima 1995) or the use of certifiedprocesses (Chiesa et al 1996) These rathergeneral process measures have been supple-mented by measures of the use of specificinstruments and tools such as interactiveCAD or CAM (Maylor 2001) or the use ofcomputer-integrated manufacturing processes(Parthasarthy and Hammond 2002) but wenote that these measures betray the technologicaland NPD heritage that underpins many of theinnovation measures identified in this reviewEquivalents for service industry public ornot-for-profit sector innovations are somewhatlacking in the literature and constitute aresearch gap
Communications are important in projectmanagement Damanpour (1991) demon-strated the existence of a positive relationshipbetween internal communication and innova-tion Internal communication facilitates thedispersion of ideas within an organizationincreases the diversity and also contributes tothe team lsquoclimatersquo Communication can bemeasured by various integration mechanismseg committees numbers of meetings andcontacts (Damanpour 1991) There are also
copy Blackwell Publishing Ltd 2006 37
March 2006
measures of external communications whichtend to focus on whether communication istaking place the level at which it occurs andwith whom (Cebon and Newton 1999 Leeet al 1996 Rothwell 1992 Souitaris 2002)These measures of internal and external com-munication in the literature are based on bothsubjective evaluations and objective frequencycounts Subjective measures include lsquowe alwaysconsult supplierscustomers on new productideasrsquo (Parthasarthy and Hammond 2002) andlsquodegree of organization members involved andparticipating in extra-organizational professionalactivitiesrsquo (Damanpour 1991) Objective countsinclude (Damanpour 1991) lsquoextent of commu-nication amongst organizational units or groupsmeasured by various integrating mechanismssuch as numbers of committees and frequencyof meetingsrsquo (Anderson and West 1998)lsquofrequency of formal meetings concerningnew ideasrsquo (Souitaris 2002 Szakonyi 1994)lsquohow well do the technical and finance peoplecommunicate with one anotherrsquo
It is widely recognized that collaboratingwith suppliers (Bessant 2003) and customers(von Hippel 1986) can also make a significantcontribution to the innovation processMeasures of collaborative working includethe use of guest engineers (Maylor 2001) thepercentage of projects in co-operation withthird parties (Kerssens-van Drongelen andBilderbeek 1999) and the extent to whichdecision-making at top levels is characterizedby cross-functional discussions (Miller andFriesen 1982) In addition Jassawalla andSashittal (1999) identify some characteristicsof internal collaboration ie that teams arecharacterized by their mindfulness levels ofat-stakeness synergy and transparency butthey do not suggest how these aspects mightbe measured which constitutes a furtherresearch gap
Commercialization
Commercialization can be considered to bethe second of the two phases in Zaltman et alrsquos(1973) conceptualization of the innovation
process that is lsquoimplementationrsquo This canmean taking an innovation to market (Chakra-vorti 2004) but may also include convincingproduction managers to adopt a series of newtechniques available to them (Single andSpurgeon 1996) Indeed the successful intro-duction of new products and services intomarkets is important for the survival andgrowth of organizations Kelm et al (1995)regard commercialization as a transitionalphase in which the organization becomesless reliant on its technological capabilities(important during the activities of initiation)but more dependent on market dynamicsCommercialization is concerned with makingthe innovative process or product a commer-cial success it includes issues such as market-ing sales distribution and joint venturesWhile technical capabilities are important forthe early stages of the innovation process anddevelopment activities for the launch andimplementation stage it is marketing capabili-ties (market investigation market testingpromotion etc) that are significant (Calantoneand di Benedetto 1988 Globe et al 1973)Verhaeghe and Kfir (2002) consider aspectsof commercialization under the headings ofmarket analysis and monitoring reaching thecustomer and market planning
Firm-level measures of the launch or com-mercialization process appear to be relativelythin In their description of the RampD processBalachandra and Brockhoff (1995) character-ize the commercialization stage as requiringlsquobig bucksrsquo market reviews and organiza-tional commitment Most measures appear tobe not much more sophisticated than thisMeasures are frequently restricted to numbersof products launched in a given period (egYoon and Lilien 1985) There is thoughsome focus on market analysis and monitor-ing (Verhaeghe and Kfir 2002) Song andParry (1996) employ a set of measures oflaunch proficiency (salesforce distributionaland promotional support) that directly addressthe lsquoadequacyrsquo of the organizationrsquos facilities inthese areas as do Avlonitis et al (2001) Andthere is a limited mention of the commercial
38 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
intentions of an organizationrsquos competitors(Calantone and di Benedetto 1988) Thethemes of proficiency of personnel in this area(eg Atuahene-Gima 1995 Cebon and New-ton 1999) of adherence to a commercializa-tion schedule (eg Griffin and Page 1993) andof formal post-launch reviews (Atuahene-Gima 1995 von Zedtwitz 2002) can also befound in the literature
Even in the work that addresses post-project reviews very little attention is directedtowards measuring innovation launch orcommercialization However this comes aslittle surprise as Hultink et al (2000) recentlyobserved that little work has been done in thearea perhaps because at least in the innova-tion literature launch activities appear to beconsidered the domain of other specialistsparticularly marketers and the process is seenas separate from innovation In their studythey investigated launch decisions associatedwith success for consumer and business-to-business products Much of the literature thatconsiders launch and commercialization doesso from the viewpoint of the adopter andassesses rates of adoption and diffusion ofinnovations over time across populations(Kessler and Chakrabarti 1996 Van DenBulte 2000)
The area of commercialization appears tobe the least developed of the issues involvedin innovation management This is a huge gapbecause without this last step the previoussteps of assembling inputs project manage-ment etc will not result in a commerciallyviable outcome for the firm We believe thatthis area of innovation is in urgent need offurther development from both theory andmeasurement viewpoints
Discussion
Innovation management measurement is acritical discipline for both academics andpractitioners The capacity of organizations toinnovate is determined by multiple factors thatrelate both to their own internal organizationand to their market environment (Rothwell
et al 1974) and the task of generating andthen converting ideas into usable and market-able products requires high levels of inter-functional co-ordination and integration Thispaper opened with the general observationthat innovation measurement does not appearto take place routinely within managementpractice and that where it does it tends tofocus on output measures Further from therelatively small number of empirical studiesof measurement in practice measurement ofinnovation management appears to be under-taken infrequently in an ad hoc fashion andrelies on dated unbalanced or under-specifiedmodels of the innovation management phe-nomenon This suggests that a large part ofthe contemporary conceptualization of theinnovation management phenomenon is over-looked in practitionersrsquo measurement prac-tices and consequently that opportunities forthe more efficient and effective managementof the innovation process are not realizedSome possible reasons for this state of affairsare failure of academics to communicate ade-quately inconsistency inaccessibility andcomplexity of measures and poor synthesisand packaging
Following a review and synthesis of theliterature we proposed a seven-dimensionalconceptualization of the innovation manage-ment phenomenon and applied it to an exam-ination of the measurement problem Throughthe application of this framework to their ownparticular context it is suggested that practi-tioners will be able to conduct an evaluationof their own innovation management activityidentify gaps weaknesses or deficiencies andalso improvement potential Further it ishoped that organizations applying the frame-work will be able to tease out areas whereinnovation is only nominally adopted in theirprocesses and identify areas where attentionand resources might be focused
From the perspective of its management itis no longer sufficient to treat innovation as alinear process where resources are channelledat one end from which emerges a new prod-uct or process The measurement framework
copy Blackwell Publishing Ltd 2006 39
March 2006
presented in Table 2 shows the breadth andvariety of elements of innovation managementthat ideally need to be measured There havebeen several studies that have investigated thelimitations of various approaches to measure-ment (eg Werner and Souder 1997) and ofspecific measures (eg Trajtenberg 1990) asthey relate to the practice of innovation Thechoice of an appropriate RampD measurementmetric depends on the userrsquos needs in terms ofcomprehensiveness of measurement type ofRampD being measured available data andamount of effort the user can afford to allocateto the exercise Nonetheless the commonciting across various papers of the measuresnoted in the innovation management frame-work presented here suggests that a base setof innovation management measures isimplicitly present in the literature eventhough they may be fragmented in appearanceand presentation By pulling together theinnovation management framework fromdiverse sources this paper aims to bring suchissues into the open and identify relevantresearch gaps Table 2 can be viewed as thebasis for a balanced scorecard (Kaplan andNorton 1992) for innovation managementthat is as a balanced set of areas that need tobe measured in order to gain insight into anorganizationrsquos holistic ability to manage inno-vation Such multidimensional approaches tomeasurement have been found in other areasof management to be an improvement on sim-ple one-dimensional measures and to be ableto capture both short- and long-term aspectsof value creation in the firm (Phelps 2004)
We have identified a large number of meas-ures and approaches in a variety of innovationmanagement areas and we have constructed ageneric set of innovation management meas-urement areas to act as a framework for bal-anced measurement However in several ofthese areas measurement gaps have beenidentified These gaps are of two types valid-ity gaps and omission gaps Validity gaps arisewhere there is insufficient evidence that pro-posed measures actually do capture drivers oroutputs of innovation management for example
we have noted the objections to counts ofpatents or increasing expenditure on RampD beingused as measures of innovative organizationsSimilarly there is an absence of evidence thatthe large number of subjective perceptions ofinnovation management practices proposed(lsquowe do Arsquo lsquowe are good at Brsquo) actually relateto innovation management performance
Omission gaps occur where the importanceof an aspect of innovation management is sup-ported in the literature but measures for thisaspect are lacking Omission gaps are particu-larly prevalent in the elements of innovationmanagement such as knowledge managementinnovation strategy and commercializationthat do not feature strongly in the literature ontechnological and manufacturing-based inno-vation Another area traditionally not givenmuch emphasis in this literature is organiza-tion and culture which fortunately is bettertreated by the organizational behaviour litera-ture where a number of measures have beendeveloped Much of the current state of meas-urement practice can be traced back to the dis-ciplinersquos early manufacturing RampD and NPDfocus While product innovation is undoubt-edly important it is only one dimension of anorganizationrsquos innovation agenda Process andorganizational innovations are recognizedtoo as critical for competitiveness yet theseperspectives are inadequately represented inmeasurement terms
General areas of omission in this fieldrelate to an over-reliance on financial meas-ures rather than process measures for exam-ple the use of financial measures of portfoliooptimization but an absence of portfoliocapability measures a similar reliance oncodified knowledge such as patents to theexclusion of more intangible measures suchas tacit knowledge the measurement of levelsof resources or activities with no indication ofwhat an optimal level would be the measure-ment of drivers of innovation without meas-ures of whether these drivers are aligned witheach other and with firm strategy measures ofpresence that do not measure quality (eg theuse of dichotomous (yesno) measures that do
40 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
not indicate how well an action is implementedand measures of the presence of leadership(such as champions) but not of quality ofleadership) a general absence of measuresfor important properties of organizationalstructures such as flexibility and a lack ofmeasures of the match between structure andenvironment a technological and NPD bias toproject management measures and a relativeabsence of measures for service sectors apaucity of measures for internal communica-tions and a general lack of measures forcommercialization management ndash in particulararound marketing and sales capabilities forinnovative products and services All thesegaps provide the potential for further researchin innovation management measurement
The absence of an accepted framework ofinnovation management measures leads notonly to the gaps identified above but also toother problems in the literature One is that itis frequently unclear whether or not the met-rics used are of the researchersrsquo own devisingdrawn from the literature or are what are usedby the organizations being studied Nor is italways clear when metrics are devised orrecommended whether they are intended foruse in a research capacity or for managementtasks Further the measures proposed in theliterature often seem to be proposed abstractlywith little consideration given to the use ofmeasures as a management tool in the day-to-day context of managing innovation In theabsence of a comprehensive framework forinnovation management measurement organ-izations will inevitably resort to ad hoc andpartial metrics which can encourage wastefulpractice (eg measuring innovation managementcapability according to annual RampD spend)We hope that the framework constructed inthis paper will be useful in the constructionof comprehensive measures of innovationmanagement
Acknowledgements
The research reported here was supported bya grant from Cranfield School of Management
the authors gratefully acknowledge this supportFurther the authors are grateful to the editorsand two anonymous reviewers for their helpfuland insightful comments on previous versionsof this paper
Note
1 Corresponding author Telephone +44 (0) 207594 9137 e-mail radamsimperialacuk
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Amabile TM (1998) How to kill creativity HarvardBusiness Review SeptemberndashOctober 77ndash87
Amabile TM Conti R Coon H Lazenby J andHerron M (1996) Assessing the work environ-ment for creativity Academy of Management Jour-nal 39 1154ndash1184
Ambrosini V and Bowman C (2001) Tacit know-ledge some suggestions for operationalisationJournal of Management Studies 38 811ndash829
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Anderson NR and West MA (1998) Measuringclimate for work group innovation developmentand validation of the team climate inventory Jour-nal of Organizational Behavior 19 235ndash258
Atuahene-Gima K (1995) An exploratory analysisof the input of market orientation on new productperformance a contingency approach Journal ofProduct Innovation Management 12 275ndash293
Avlonitis GJ Papastathopoulou PG and Gounaris SP(2001) An empirically-based typology of productinnovativeness for new financial services success
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March 2006
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Balachandra R and Brockhoff K (1995) Are RampDproject termination factors universal Research-Technology Management 38 31ndash36
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Bess G (1998) A first stage organization life cyclestudy of six emerging nonprofit organizations inLos Angeles Administration in Social Work 2235ndash52
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Bessant J and Francis D (1997) Implementing thenew product development process Technovation17 189ndash197
Blackler F (1995) Knowledge knowledge work andorganizations an overview and interpretationOrganization Studies 16 1021ndash1046
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Brenner MS (1994) Practical RampD project prioriti-zation Research Technology Management 37 38ndash43
Brown MG and Svenson RA (1988) MeasuringRampD productivity Research-Technology Manage-ment JulyndashAugust 11ndash15
Brown SL and Eisenhardt KM (1997) The art ofcontinuous change linking complexity theory andtime-paced evolution in relentlessly shifting organiza-tions Administrative Science Quarterly 42 1ndash34
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Burns TR and Stalker GM (1961) The Manage-ment of Innovation London Tavistock
Calantone RJ and di Benedetto CA (1988) Anintegrative model of the new product developmentprocess an empirical validation Journal of Prod-uct Innovation Management 5 201ndash215
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Chakravorti B (2004) The new rules for bringinginnovations to market Harvard Business Review82 58ndash67
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Chiesa V Coughlan P and Voss A (1996) Devel-opment of a technical innovation audit Journal ofProduct Innovation Management 13 105ndash136
Cohen WM and Levinthal DA (1990) Absorptivecapacity a new perspective on learning and inno-vation Administrative Science Quarterly 35 128ndash152
Cooper RG (1979a) The dimensions of industrialnew product success and failure Journal of Mar-keting 43 93ndash103
Cooper RG (1979b) Identifying industrial newproduct success Project NewProd Industrial Mar-keting Management 8 124ndash135
Cooper RG (1984) The strategyndashperformance linkin product innovation RampD Management 14 247ndash259
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Innovation management measurement A review
Cooper RG (1990) Stage-gate systems a new toolfor managing new products Business Horizons 3344ndash56
Cooper RG and Kleinschmidt EJ (1990) Newproduct success factors a comparison of lsquokillsrsquoversus successes and failures RampD Management20 47ndash64
Cooper RG and Kleinschmidt EJ (1995) Bench-marking the firmrsquos critical success factors in newproduct development Journal of Product Innova-tion Management 12 374ndash391
Cooper RG Edgett SJ and Kleinschmidt EJ(1999) New product portfolio management prac-tices and performance Journal of Product Innova-tion Management 16 333ndash351
Cooper RG Edgett SJ and Kleinschmidt EJ(2001) Portfolio Management for New Products2nd edition Cambridge MA Perseus
Cooper RG Edgett SJ and Kleinschmidt EJ (2004)Benchmarking best NPD practices Research-Technology Management 47 50ndash59
Cordero R (1990) The measurement of innovationperformance in the firm an overview ResearchPolicy 19 185ndash192
Cormican K and OrsquoSullivan D (2004) Auditingbest practice for effective product innovationmanagement Technovation 24 819ndash829
Coughlan P Chiesa V and Voss C (1994) Evalu-ating leadership as an enabler of innovation InProceedings 2nd International Product Develop-ment Management Conference GothenburgSweden 30ndash31 May Brussels European Institutefor Advanced Studies in Management
Covin JG and Slevin DP (1989) Strategic manage-ment of small firms in hostile and benign environ-ments Strategic Management Journal 10 75ndash87
Daft R (1978) A dual-core model of organizationalinnovation Academy of Management Journal 21193ndash210
Damanpour F (1991) Organizational innovation ameta-analysis of effects of determinants and mod-erators Academy of Management Journal 34 555ndash590
Damanpour F (1996) Organizational complexity andinnovation developing and testing multiple contin-gency models Management Science 42 693ndash716
Davis MC (1998) Knowledge management Infor-mation Strategy The Executiversquos Journal 15 11ndash22
De Brentani U (1991) Success factors in developingnew business services European Journal of Mar-keting 25 33ndash60
De Leede J Nijhof AH and Fisscher OA (1999)The myth of self managing teams a reflection onthe allocation of responsibilities between individu-als teams and the organisation Journal of BusinessEthics 21 203ndash215
Deeds DL (2001) The role of RampD intensitytechnical development and absorptive capacity increating entrepreneurial wealth in high technologystart-ups Journal of Engineering and TechnologyManagement 18 29ndash47
Denyer D and Neely A (2004) Introduction to spe-cial issue innovation and productivity performancein the UK International Journal of ManagementReviews 45 131ndash135
Di Benedetto CA (1996) Identifying the key suc-cess factors in new product launch Journal ofProduct Innovation Management 16 530ndash544
Dodgson M and Hinze S (2000) Indicators used tomeasure the innovation process defects and possi-ble remedies Research Evaluation 8 101ndash114
Dougherty D and Cohen M (1995) Product inno-vation in mature firms In Bowman E and KogutB (eds) Redesigning the Firm New York OxfordUniversity Press
Dougherty D and Hardy C (1996) Sustained prod-uct innovation in large mature organizations over-coming innovation-to-organization problemsAcademy of Management Journal 39 1120ndash1153
DTI (1998) An Audience With Innovation Innovationin Management London Department of Trade andIndustry
Dyer B and Song XM (1998) Innovation strategyand sanctioned conflict a new edge in innovationJournal of Product Innovation Management 15505ndash519
Ekvall G (1996) Organizational climate for creativ-ity and innovation European Journal of Work andOrganizational Psychology 5 105ndash123
Ernst H (2002) Success factors of new productdevelopment a review of the empirical literatureInternational Journal of Management Reviews 41ndash40
Farrukh C Phaal R Probert D Gregory M andWright J (2000) Developing a process for therelative valuation of RampD programmes RampDManagement 30 43ndash53
Frenkel A Maital S and Grupp H (2000) Meas-uring dynamic technical change a technometricapproach International Journal of TechnologyManagement 20 429ndash441
Galunic DC and Rodan S (1998) Resource recom-binations and the firm knowledge structures and
copy Blackwell Publishing Ltd 2006 43
March 2006
the potential for Schumpeterian innovationStrategic Management Journal 19 1193ndash1201
Geisler E (1995) An integrated costndashperformancemodel of research-and-development evaluationOmega ndash International Journal of ManagementScience 23 281ndash294
Glaser BG and Strauss AL (1967) The Discoveryof Grounded Theory Strategies for QualitativeResearch London Aldine
Globe S Levy GW and Schwartz CM (1973)Key factors and events in the innovation processResearch Management 16 8ndash15
Goffin K and Pfeiffer R (1999) Innovation Man-agement in UK and German Manufacturing Com-panies London Anglo-German Foundation for theStudy of Industrial Society
Grant RM (1991) The resource-based theory ofcompetitive advantage implications for strategyformulation California Management Review 33114ndash135
Greve HR (2003) A behavioral theory of RampDexpenditures and innovations evidence fromshipbuilding Academy of Management Journal 46685ndash702
Griffin A (1997) PDMA research on new productdevelopment practices updating trends and bench-marking best practices Journal of Product Innova-tion Management 14 429ndash458
Griffin A and Page AL (1993) An interim reporton measuring product development success andfailure Journal of Product Innovation Manage-ment 10 291ndash308
Griliches Z (1990) Patent statistics as economicindicators a survey Journal of Economic Litera-ture 28 1661ndash1707
Hall DL and Nauda A (1990) An interactiveapproach for selecting IRampD projects IEEE Trans-actions on Engineering Management 37 126ndash133
Hauser JR and Zettelmeyer F (1997) Metrics toevaluate RDampE Research-Technology Manage-ment 40 32ndash38
Henriksen AD and Traynor AJ (1999) A practicalRampD project-selection scoring tool IEEE Trans-actions on Engineering Management 46 158ndash170
Hipp C and Grupp H (2005) Innovation in theservice sector the demand for service specific-innovation measurement concepts and typologiesResearch Policy 34 517ndash535
Holbek J (1988) The innovation design dilemmasome notes on its relevance and solutions InGroslashnhaug K and Kaufmann G (eds) Innovation
A Cross-Disciplinary Perspective NorwegianUniversity Press pp 253ndash277
Hope Hailey V (2001) Breaking the mould Innova-tion as a strategy for corporate renewal Inter-national Journal of Human Resource Management12 1126ndash1140
Hull R Coombs R and Peltu M (2000) Know-ledge management practices for innovation anaudit tool for improvement International Journalof Technology Management 20 633ndash656
Hultink EJ Hart S Robben HSJ and Griffin A(2000) Launch decisions and new product successan empirical comparison of consumer and indus-trial products Journal of Product Innovation Man-agement 17 5ndash23
Jassawalla AR and Sashittal HC (1999) Buildingcollaborative cross-functional new product teamsAcademy of Management Executive 13 50ndash63
Jenkins S Forbes S Durrani TS and BanerjeeSK (1997) Managing the product developmentprocess 1 An assessment International Journal ofTechnology Management 13 359ndash378
Kaplan RS and Norton DP (1992) The balancedscorecard ndash measures that drive performance HarvardBusiness Review JanuaryndashFebruary 71ndash79
Keller RT (1986) Predictors of performance ofproject groups in RampD organizations Academy ofManagement Journal 29 715ndash726
Kelm KM Narayanan VK and Pinches GE (1995)Shareholder value creation during research-and-development innovation and commercialization stagesAcademy of Management Journal 38 770ndash786
Kerssens-van Drongelen IC and Bilderbeek J(1999) RampD performance measurement morethan choosing a set of metrics RampD Management29 35ndash46
Kerssens-van Drongelen IC and de Weerd-Nederhof PC (1999) The use of performancemeasurement tools for balancing short- and long-term NPD performance International Journal ofInnovation Management 3 397ndash426
Kessler EH and Chakrabarti AK (1996) Innova-tion speed a conceptual model of context anteced-ents and outcomes Academy of ManagementReview 21 1143ndash1191
Kim B and Oh H (2002) An effective RampD per-formance measurement system survey of KoreanRampD researchers Omega ndash International Journalof Management Science 30 19ndash31
Kim J and Wilemon D (2002) Strategic issues inmanaging innovationrsquos fuzzy front-end EuropeanJournal of Innovation Management 5 27ndash39
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Innovation management measurement A review
Kimberly JR (1981) Managerial innovation InNystrom PC and Starbuck WH (eds) Handbookof Organizational Design Vol 1 New YorkOxford University Press pp 84ndash104
King N (1992) Modelling the innovation process anempirical comparison of approaches Journal ofOccupational and Organizational Psychology 6589ndash100
Kirton MJ (1976) Adaptors and innovators adescription and measure Journal of Applied Psy-chology 61 622ndash629
Kivimaumlki M Kuk G Elovainio M Thomson LKalliomaumlki-Levanto T and Heikkilauml A (1997)The team climate inventory (TCI) ndash four or fivefactors Testing the structure of TCI in samples oflow and high complexity jobs Journal of Occupa-tional and Organizational Psychology 70 375ndash389
Kivimaumlki M Lansisalmi H Elovainio M Heik-kila A Lindstrom K Harisalo R Sipila K andPuolimatka L (2000) Communication as a deter-minant of organizational innovation RampD Man-agement 30 33ndash42
Kleinknecht A (1987) Measuring RampD in smallfirms how much are we missing Journal of Indus-trial Economics 36 253ndash256
Koen P Ajamian G Burkart R Clamen ADavidson J DrsquoAmore R Elkins C Herald KIncorvia M Johnson A Karol R Seibert RSlavejkov A and Wagner K (2001) Providingclarity and a common language to the lsquofuzzy front endrsquoResearch-Technology Management 44 46ndash55
Koput K (1997) A chaotic model of innovativesearch some answers many questions Organiza-tion Science 8 528ndash542
Lawrence PR and Lorsch JW (1967) Organizationand Environment Harvard MA Harvard Univer-sity Press
Lee M Son B and Lee H (1996) Measuring RampDeffectiveness in Korean companies Research-Technology Management 39 28ndash31
Leonard D and Sensiper S (1998) The role of tacitknowledge in group innovation California Man-agement Review 40 112ndash132
Leseure M Birdi K Bauer J Denyer D andNeely A (2004) Adoption of Promising PracticeA Systematic Review of the Literature LondonAdvanced Institute of Management Research
Li HY and Atuahene-Gima K (2001) Productinnovation strategy and the performance of newtechnology ventures in China Academy of Man-agement Journal 44 1123ndash1134
Liao J Welsch H and Stoica M (2003) Organiza-tional absorptive capacity and responsivenessan empirical investigation of growth-orientedSMEs Entrepreneurship Theory and Practice 2863ndash86
Linstone HA and Turoff M (eds) (2002) The Del-phi Method Techniques and Applications httpwwwisnjitedupubsdelphibook
Loch C Stein L and Terwiesch C (1996) Meas-uring development performance in the electronicsindustry Journal of Product Innovation Manage-ment 13 3ndash20
Mathisen GE and Einarsen S (2004) A review ofinstruments assessing creative and innovative envi-ronments within organizations Creativity ResearchJournal 16 119ndash140
Maylor H (2001) Assessing the relationshipbetween practice changes and process improve-ment in new product development Omega ndashInternational Journal of Management Science 2985ndash96
McAdam RMS (1999) The process of knowledgemanagement within organizations a critical assess-ment of both theory and practice Knowledge andProcess Management 6 101ndash113
McManus RJ Wilson S Delaney BC Fitzmau-rice DA Hyde CJ Tobias RS Jowett S andHobbs FDR (1998) Review of the usefulness ofcontacting other experts when conducting a litera-ture search for systematic reviews British MedicalJournal 317 1562ndash1563
Miles RE and Snow CC (1978) Organization StrategyStructure and Process New York McGraw-Hill
Miller D and Friesen PH (1982) Innovation inconservative and entrepreneurial firms two modelsof strategic momentum Strategic ManagementJournal 3 1ndash24
Mintzberg H (1978) Patterns in strategy formationManagement Science 24 934ndash948
Mitroff I (1987) Business Not As Usual Rethinkingour Individual Corporate and Industrial Strategiesfor Global Competition London Jossey-Bass
Moenaert RK De Meyer A Souder WE andDeschoolmeester D (1995) RampDMarketing com-munication during the fuzzy front-end IEEETransactions on Engineering Management 42243ndash257
Neely A and Hii J (1998) Innovation and BusinessPerformance A Literature Review Report producedfor Government Office for the Eastern RegionCambridge The Judge Institute of ManagementStudies University of Cambridge
copy Blackwell Publishing Ltd 2006 45
March 2006
Nelson R and Winter G (1982) An EvolutionaryTheory of Economic Change Cambridge MABelknap Press
Nohria N and Gulati R (1996) Is slack good or badfor innovation Academy of Management Journal39 1245ndash1264
Nonaka I (1991) The knowledge-creating companyHarvard Business Review NovemberndashDecember96ndash104
Nonaka I and Takeuchi H (1995) The KnowledgeCreating Company How Japanese CompaniesCreate the Dynamics of Innovation New YorkOxford University Press
OrsquoBrien JP (2003) The capital structure implica-tions of pursuing a strategy of innovation StrategicManagement Journal 24 415ndash431
OrsquoReilly CA and Tushman ML (1997) Using cul-ture for strategic advantage promoting innovationthrough social control In Tushman ML andAnderson P (eds) Managing Strategic Innovationand Change A Collection of Readings New YorkOxford University Press pp 200ndash216
Oliver N Dewberry E and Dostaler I (1999) Newproduct development performance and practice aninternational benchmarking study in the consumerelectronics industry In Proceedings 6th Inter-national Product Development Management Confer-ence Cambridge UK Brussels European Institutefor Advanced Studies in Management
Pakes A and Griliches Z (1980) Patents and RampDat the firm level a first report Economic Letters 5377ndash381
Parthasarthy R and Hammond J (2002) Productinnovation input and outcome moderating effectsof the innovation process Journal of Engineeringand Technology Management 19 75ndash91
Patterson F (2003) Innovation potential indicatorAvailable at wwwoppcouk
Phelps B (2004) Smart Business Metrics MeasureWhat Really Counts and Manage What Makes theDifference London FT-Prentice Hall
Pinto JK and Prescott JE (1988) Changes in crit-ical success factors over the stages in the projectlife cycle Journal of Management 14 5ndash18
Pitt M and Clarke K (1999) Competing on compe-tence a knowledge perspective on the managementof strategic innovation Technology Analysis andStrategic Management 11 301ndash316
Pittaway L Robertson M Munir K Denyer D andNeely A (2004) Networking and Innovation in theUK a Systematic Review of the Literature LondonAdvanced Institute of Management Research
Porter ME and Ketels CHM (2003) UK Compet-itiveness Moving to the Next Stage DTI Econom-ics Paper No 3 URN 03899
Pugh DS Hickson DJ Hinings CR and TurnerC (1969) The context of organization structuresAdministrative Science Quarterly 14 91ndash114
Ramanujam V and Mensch GO (1985) Improvingthe strategyndashinnovation link Journal of ProductInnovation Management 2 213ndash223
Richard O McMillan A Chadwick K and DwyerS (2003) Employing an innovation strategy inracially diverse workforces ndash effects on firm per-formance Group amp Organization Management 28107ndash126
Rickards T (1991) Innovation and creativity treesand pathways RampD Management 21 97ndash108
Rochford L (1991) Generating and screening newproduct ideas Industrial Marketing Management20 287ndash296
Rothwell R (1992) Successful industrial innovationcritical factors for the 1990s RampD Management22 221ndash239
Rothwell R Freeman C Horseley A JervisVTP Robertson AB and Townsend J (1974)SAPPHO updated ndash Project SAPPHO phase IIResearch Policy 3 258ndash291
Saleh SD and Wang CK (1993) The managementof innovation ndash strategy structure and organiza-tional climate IEEE Transactions on EngineeringManagement 40 14ndash21
Schmidt RL and Freeland JR (1992) Recentprogress in modelling RampD project-selection proc-esses IEEE Transactions on Engineering Manage-ment 39 189ndash201
Schroeder RG Van de Ven AH Scudder GDand Polley D (1989) The development of innova-tion ideas In Van de Ven AH Angle HL andPoole M (eds) Research on the Management ofInnovation The Minnesota Studies New YorkHarper amp Row pp 107ndash133
Scott S and Bruce R (1994) Determinants ofinnovative behaviour a path model of individualinnovation Academy of Management Journal 37580ndash607
Shane S Venkataraman S and MacMillan I (1995)Cultural differences in innovation championingstrategies Journal of Management 21 931ndash952
Shepard HA (1967) Innovation-resisting and inno-vation producing organizations Journal of Busi-ness 40 470ndash477
Shin J and McClomb GE (1998) Top executiveleadership and organizational innovation an
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Innovation management measurement A review
empirical investigation of nonprofit human serviceorganizations (HSOS) Administration in SocialWork 22 1ndash21
Single AW and Spurgeon WM (1996) Creatingand commercializing innovation inside a skunkworks Research-Technology Management 39 38ndash41
Song XM and Parry ME (1996) What separatesJapanese new product winners from losersJournal of Product Innovation Management 13422ndash439
Souitaris V (2002) Firm-specific competenciesdetermining technological innovation a survey inGreece RampD Management 32 61ndash77
Stock GN Greis NP and Fischer WA (2001)Absorptive capacity and new product developmentJournal of High Technology ManagementResearch 12 77ndash91
Sundbo J (1997) Management of innovation inservices Service Industries Journal 17 432ndash455
Sveiby KE (1997) The New Organizational WealthManaging and Measuring Knowledge-BasedAssets San Francisco CA Berrett-Koehler
Szakonyi R (1994) Measuring RampD effectiveness IResearch-Technology Management 37 27ndash32
Thompson L (2003) Improving the creativity oforganizational work groups Academy of Manage-ment Executive 17 96ndash109
Tidd J Bessant J and Pavitt K (1997) ManagingInnovation Integrating Technological Market andOrganizational Change Chichester UK JohnWiley
Tipping J and Zeffren E (1995) Assessing thevalue of your technology ResearchndashTechnologyManagement 38 22ndash40
Trajtenberg M (1990) A penny for your quotes ndashpatent citations and the value of innovations RandJournal of Economics 21 172ndash187
Tranfield D Denyer D and Smart P (2003)Towards a methodology for developing evidence-informed management knowledge by means of asystematic review British Journal of Management14 207ndash222
Tsai W (2001) Knowledge transfer in intraorganiza-tional networks effects of network position andabsorptive capacity on business unit innovation andperformance Academy of Management Journal44 996ndash1004
Van Den Bulte C (2000) New product diffusionacceleration measurement and analysis MarketingScience 19 366ndash380
Verhaeghe A and Kfir R (2002) Managing innovationin a knowledge intensive technology organisation(KITO) RampD Management 32 409ndash417
Verworn B (2002) The fuzzy front end of productdevelopment an exploratory study In Proceedings9th International Product Development ManagementConference Sophia Antipolis France pp 863ndash878Brussels European Institute for Advanced Studiesin Management
Veryzer RW (1998) Discontinuous innovation andthe new product development process Journal ofProduct Innovation Management 15 304ndash321
Volberda HW (1996) Towards the flexible formhow to remain vital in hypercompetitive environ-ments Organizational Science 7 359ndash374
Von Hippel E (1986) Lead users a source of novelproduct concepts Management Science 32 791ndash805
Von Zedtwitz M (2002) Organizational learningthrough post-project reviews in RampD RampD Man-agement 32 255ndash268
Voss C Chase R and Roth A (1999) Internationalservice study Decision Line May 4ndash7
Vyakarnam S and Adams RJ (2001) Institutionalbarriers to enterprise support an empirical studyEnvironment and Planning C Government andPolicy 19 335ndash353
Werner BM and Souder WE (1997) MeasuringRampD performance ndash state of the art Research-Technology Management 40 34ndash42
West MA (1990) The social psychology of innova-tion in groups In West MA and Farr JL (eds)Innovation and Creativity at Work Psychologicaland Organizational Strategies Chichester UKJohn Wiley pp 309ndash333
West MA and Anderson NR (1996) Innovation intop management teams Journal of Applied Psychol-ogy 81 680ndash693
White A (2002) Enabling factors in the front end ofthe innovation process In Proceedings 9thInternational Product Development ManagementConference Sophia Antipolis France BrusselsEuropean Institute for Advanced Studies inManagement pp 879ndash887
Wolfe RA (1994) Organizational innovationreview critique and suggested research direc-tions Journal of Management Studies 31 405ndash431
Yoon E and Lilien GL (1985) A new productlaunch-time decision model Journal of ProductInnovation Management 3 134ndash144
Zahra SA and George G (2002) Absorptivecapacity a review reconceptualization and
copy Blackwell Publishing Ltd 2006 47
March 2006
extension Academy of Management Review 27185
Zaltman G Duncan R and Holbek J (1973) Inno-vations and Organizations New York John Wiley
Zien KA and Buckler SA (1997) From experiencedreams to market crafting a culture of innovationJournal of Product Innovation Management 14274ndash287
Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
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Innovation management measurement A review
uncertainty of project failure (Kimberly 1981)An alternative view however suggests a nega-tive relationship slack can become synonymouswith waste and represents a cost that should beeliminated (Nohria and Gulati 1996) Typicallyfinancial measures of slack are used (Daman-pour 1991) although Miller and Friesen (1982)use both financial and human measures ofslack
Use of systems and tools is an importantinput to the innovation process (Bessant andFrancis 1997 Cooper et al 2004) Measuresidentified tend to relate to whether or not theorganization has or makes use of formal sys-tems and tools in support of innovation Thesecan be of various sorts such as the availabilityand use of tools and techniques for promotingcreativity (Amabile 1998 Rickards 1991Rochford 1991 Thompson 2003) or the avail-ability and use of systems of quality controlranging from informal methods to specifictechniques such as total quality management(TQM) (Souitaris 2002) While tool use canbe evaluated on a binary or degree of use scalethere is little other than Chiesa et alrsquos (1996)technical innovation audit that attempts tomeasure whether or not tool use is consistentwith a firmrsquos innovation requirements and isintegrated into its processes
We conclude that while there has been aconcentration on financial measurement ofinputs there is less emphasis on measuringother aspects of the category Even withinfinancial measures there are few that attemptto determine the adequacy of funding for theinnovation project Further most measuresreflect a preoccupation with RampD and NPDrather than other forms of innovation (egprocess business model) In particular thesofter inputs of skills and knowledge arepoorly represented by measurement instru-ments Tacit knowledge input appears not tobe well captured by extant measures and nomeasures of appropriate skill levels have beendeveloped This is an imbalance that needsto be addressed by further work to developa balanced set of measures covering allsub-dimensions of the input category
Knowledge Management
Knowledge absorption an organizationrsquosability to identify acquire and utilize externalknowledge can be critical to a firmrsquos success-ful operation (Zahra and George 2002) Theconcept of knowledge has received muchattention in recent years (eg Blackler 1995McAdam 1999 Nonaka 1991) and has beenasserted to play a critical role in the innova-tion process (Hull et al 2000) Knowledgemanagement is concerned with obtainingand communicating ideas and informationthat underlie innovation competencies andincludes idea generation absorptive capacityand networking Knowledge managementcovers the management of explicit andimplicit knowledge held by the organization(Davis 1998 Nonaka 1991) as well as theprocesses of gathering and using informa-tion The three areas within knowledgemanagement of importance for innovationmanagement identified in the literatureare idea generation knowledge repository(including the management of implicitand explicit knowledge) and informationflows (including information gathering andnetworking)
The importance of generating sufficientnumbers of ideas has been well established inthe literature Ideas are the raw materials forinnovation it is relatively inexpensive togenerate and screen ideas yet this can havesignificant impact on ultimate success orfailure (Cooper 1988) Several authors haveconceptualized the early stages of the innova-tion process as a somewhat fuzzy period(Kim and Wilemon 2002 Moenaert et al1995 Verworn 2002) including opportunityidentification opportunity analysis idea gen-esis idea selection and concept development(Koen et al 2001)
At the commencement of the innovationprocess when ideas are generated andexplored measures tend mostly to be quanti-tative inexpensive and rapid As the processprogresses and uncertainties with regard toappropriateness feasibility and business case
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March 2006
are reduced measurement approaches becomeincreasingly qualitative and possibly morecostly and time-consuming to deploy Meas-ures imply an assumption that the objective isto generate as many ideas as possible throughthe use of generative tools Several measuresattempt to count the number of ideas gener-ated in a period (cf Chiesa et al 1996 Leeet al 1996) while others probe the extent towhich organizations are using different gener-ative tools and techniques (cf Cebon andNewton 1999 Chiesa et al 1996 Loch et al1996 Rochford 1991 Szakonyi 1994Thompson 2003)
If knowledge is fundamental to innovationthen it should be possible to measure theaccumulated knowledge of the firm itsknowledge repository One aspect of innova-tion relates to combinations of new andexisting knowledge which privileges the con-tribution of internal and external knowledgeand the mechanisms by which it flows intoand within an organization (Galunic andRodan 1998 Nonaka and Takeuchi 1995 Pittand Clarke 1999) Central to this perspectiveis the idea of lsquoabsorptive capacityrsquo the firmrsquosability to absorb and put to use new knowledgeand involving lsquoan ability to recognize thevalue of new external knowledge assimilateit and apply it to commercial endsrsquo (Cohenand Levinthal 1990 128) Absorptive capacityresults from a prolonged process of invest-ment and knowledge accumulation within thefirm and its development is path dependentFirms with strong absorptive capabilities aremore likely to acquire knowledge and learneffectively from outside Higher levels ofabsorptive capacity appear to be positivelyrelated to innovation and performance (Chen2004 Tsai 2001) but it is impossible topredict what is the lsquorightrsquo level of investmentin absorptive capacity for any individualfirm (Cohen and Levinthal 1990) meaningthat it is not readily amenable to interna-tional benchmarking However the conceptualdevelopment and empirical studies infer orimply a range of organizational knowledgestates
Several quantitative approaches have beendeveloped for the measurement of importedtangible knowledge The most frequently usedapproach counts numbers or value of patentsbrought in However this restricts its applica-tion to contexts in which patents are signifi-cant and overlooks those industries wherethey do not feature For a while patent datawas widely accepted as a proxy measure forinnovation More recently however the valid-ity of patent statistics has been questionedpatents vary in their utility for organizationsand so their input value to the innovation can-not adequately be judged in terms of a cashprice (Griliches 1990 Pakes and Griliches1980) Only a few studies have attempted todevise measures for other contexts For exam-ple Kleinknecht (1987) constructed a ques-tion designed to capture the informal hours ofRampD work that are hypothesized to be hiddenwithin other activities or to take place outsideformal working hours
Patents represent codified knowledge butthe importance of tacit knowledge to organi-zational innovation is underscored in theresource-based approach (Barney 1991 Galu-nic and Rodan 1998 Grant 1991 Leonardand Sensiper 1998) Tacit knowledge is animportant resource when it is has value for theorganization is difficult for competitors toimitate is rare and can be operationalized bythe organization Of particular importance isits acquisition and use (Bess 1998) It can beacquired opportunistically or by a deliberatepolicy of search
Tacit knowledge is notoriously difficult tomeasure in organizational research andmethodologies for its investigation andmeasurement can be complex Ambrosiniand Bowman (2001) for example proposean approach that consists of causal mappingfacilitated by story-telling and the use of meta-phor Other attempts to capture tacit know-ledge and group memory have been reportedby Oliver et al (1999) At the level of theorganization Sveiby (1997) suggests thedifference between market value and netbook value as an indicator of the value to an
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Innovation management measurement A review
organization of intangible knowledge assetsThe first method is resource intensive whilein the second it is not clear how much of theidentified value can be attributed to inputs intoinnovation Tacit knowledge input appears notto be well captured by extant measures
Information flows into and within the firmare important in sparking ideas and in allow-ing the development of innovative conceptsThree measurement approaches to informa-tion flows can be identified first measures ofthe linkages that the innovating group main-tains with external organizations and sourcessecond measures of internal informationgathering processes Third measures of cus-tomer information contacts
Linkage measures determine whether or notthe organization has and maintains externallinkages with other organizations or sourcesof information eg through participation inresearch projects university links or attend-ance at trade shows (Atuahene-Gima 1995Tipping and Zeffren 1995) These are princi-pally dichotomous measures only infre-quently is there a measure that implies somesort of qualitative assessment of the nature ofthe linkages Cebon and Newtonrsquos (1999)measures suggest that quality and diversity oflinkage might be an important factor forexample visits to exemplary projects
Statistics on the use of formal methods ofinformation gathering such as project reviewsand the use of technical reports (Oliver et al1999) provide a frequently used approach tothe measurement of information gatheringCebon and Newton (1999) suggest bench-marking information gathering against com-petitorsrsquo activities to gauge how well theactivity is performed Another important areaabout which a firm needs understanding andinformation is customers Atuahene-Gima(1995) lists a series of measures specificallyaimed at examining the extent to which organ-izations make use of customers as a source ofinformation and include measures assessingthe adequacy of information and customercontact time (Lee et al 1996 Miller andFriesen 1982)
Innovation Strategy
Ramanujam and Mensch (1985) defineinnovation strategy as a timed sequence ofinternally consistent and conditional resourceallocation decisions that are designed to fulfilan organizationrsquos objectives Activities mustbe consistent with an overarching organiza-tional strategy that implies that managementmust take conscious decisions regardinginnovation goals (Sundbo 1997) Innovationstrategy is generally understood to describe anorganizationrsquos innovation posture with regardto its competitive environment in terms of itsnew product and market development plans(Dyer and Song 1998) This techno-centricview predominates in the literature andoverlooks those innovative initiatives that areinternally focused (for example the adoptionof new management techniques and prac-tices) In the conceptualization of innovationstrategy as an articulation of the organizationrsquoscommitment to the development of productsthat are new to itself andor to its marketsand because strategy does not operate in avacuum but requires a structural context twocomplementary approaches to its measure-ment which have been described as objectiveand subjective (Li and Atuahene-Gima 2001)can be identified
In the literature scholars principally haveadapted measures from strategic managementresearch to explore the existence nature andextent of innovation strategy Richard et al(2003) use three scale items drawn from thestrategic posture scale devised by Covin andSlevin (1989) who in turn draw on Milesand Snowrsquos (1978) lsquoprospectorsrsquo and Mintz-bergrsquos (1978) lsquoentrepreneurialrsquo organizationsfor their assessment of bank innovativenessThese studies classify organizations based ontheir approach to innovation using classifica-tions that are ontologically grounded in theassumption that innovation orientation can bedeciphered from quantitative interpretationsof new product and market activity
Other objective evidence of an organizationrsquosinnovation strategic posture may include many
copy Blackwell Publishing Ltd 2006 31
March 2006
of the input measures (such as level of RampDexpenditure) that we have already discussedIt is argued that it is not their absolute magni-tude but their magnitude relative to industryrivals that is significant As has been notedalthough these may be useful indicators ofcommitment or intent they could mask pro-cess inefficiencies However OrsquoBrienrsquos (2003)observation that an interaction betweenintended strategy and slack will influence per-formance suggests that process inefficienciesare less likely to occur where an innovationstrategy is not merely nominally adopted butis embedded in the culture behaviours andactions of the organization
In Li and Atuahene-Gimarsquos (2001) termsthe evidence for an embedded innovationstrategy is subjective and may include evalua-tions of an organizationrsquos emphasis on NPDsuch as resource allocation Saleh and Wang(1993) describe this as consisting of threemain components risk-taking proactivenessand persistent commitment to innovationThese include top management responsibilityfor innovation within the organization includ-ing specifying and communicating a directionfor innovation Cooper (1984) demonstratedthat new product performance is largelydecided by the strategy that top managementadopts The key components are the linkbetween innovation strategy and overall busi-ness goals (strategic orientation) and theprovision of leadership to make innovationhappen via a strong vision (Pinto and Prescott1988) for innovation a long-term commit-ment to innovation and a clear allocation ofresources (Cooper et al 2004) This distinc-tion between strategic planning or orientationand strategic vision or leadership is frequentlyreplicated in the literature
Two distinct types of strategic orientationmeasures can be identified in the literatureFirst those that measure whether the organi-zation has an innovation strategy this can beevaluated in several ways such as commit-ment to differentiated funding (White 2002)explicit expression (does the organizationhave an innovation strategy) (Miller and
Friesen 1982) and identifiable roles for newproducts and services (Cooper and Klein-schmidt 1990 Geisler 1995 Hauser andZettelmeyer 1997 Tipping and Zeffren 1995)The second type of measure regards strategyas a dynamic instrument that shapes andguides innovation in the organization Thesemeasures assume that strategy exists and asksquestions about how effective it is in shapingand guiding lsquoare structures and systemsalignedrsquo (Bessant 2003) lsquodo innovation goalsmatch strategic objectivesrsquo (Tipping andZeffren 1995) and further similar measures ofstrategic fit (Bessant 2003)
From a strategic leadership perspectiveDougherty and Cohen (1995) found thebehaviour of senior managers to be influentialThose chief executives most likely to makeinnovation happen are those with a clearvision of the future operation and direction oforganizational change and creativity (Shin andMcClomb 1998) Senior management areresponsible for developing and communicat-ing a vision for innovation being supportiveand adopting an attitude tolerant to changeand championing the notion of innovationwithin the organization Managerial toleranceto change creates the right climate for theimplementation stage of innovation whereconflict resolution might be necessary(Damanpour 1991)
Managerial attitude is also reflected innorms or support for innovation These are theexpectation approval and practical support ofattempts to introduce new and improved waysof doing things in the work environmentMeasures are mostly qualitative in nature andexplore perceptions mostly about the extentto which respondents recognize factors to bepresent (or absent)
Relatively few measures of championingand leadership have been uncovered in thisreview other than those that simply ask thequestion whether or not one or other existsperhaps through evidence of signs of commit-ment in annual reports (Chiesa et al 1996) orlevels of concern of top management (Coughlanet al 1994) or whether or not an individual
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Innovation management measurement A review
has been physically assigned to a particularrole (Souitaris 2002) Shane et al (1995) pro-vide a series of reflective questions designedto allow organizations to determine for them-selves their expectations and understandingof the role of champion For example lsquoto whatextent should the organization make it possiblefor the people working on an innovation tobend the rules of the organization to developthe innovation or be allowed to bypass certainpersonnel procedures to get people committedto an innovationrsquo
It must be emphasized that the dominantperspective on strategy in the literature isone that examines the relationship betweenstrategy and performance However a smallnumber of studies have examined the natureof the transitions of these states as organiza-tions adopt and embed an innovation strategyThis sub-section of the literature is under-pinned by the assumption that firms that fol-low innovation strategies differ from otherfirms in several respects It is apparent thatmore innovative firms adopt different opera-tional strategies to accommodate flexibilityand quality capabilities (Alegre-Vidal et al2004) have different capital managementpractices to facilitate slack resources (OrsquoBrien2003) are more tolerant of internal conflict insupport of creativity (Dyer and Song 1998)and maintain organizational structures that arein the lsquointermediate zone between order anddisorderrsquo (Brown and Eisenhardt 1997 22)What is clear from this literature is that anytransition towards an innovation strategy willnecessarily take several years because of theresources and energy that are necessary beforesuch a transformation can even be triggered(Hope Hailey 2001)
Organizational Culture and Structure
Burns and Stalker (1961) described a contin-gency approach to innovation managementlater developed to include concepts of func-tional differentiation specialization and inte-gration (Lawrence and Lorsch 1967) whichsuggests that environmental change prompts a
realignment of the fit between strategy andstructure That is to perform effectively anorganization must be appropriately differenti-ated specialized and integrated Pugh et al(1969) argued that the structure of an organi-zation is strongly related to the context withinwhich it functions Our closing discussion inthe previous section that the characteristics oforganizations following an innovation-focusedstrategy will differ from those that do not isconsistent with this contingency approach andin the following we focus on those dimen-sions of culture and structure that have beenidentified to differentiate between innovativeand non-innovative organizations
Organizational culture and structure concernthe way staff are grouped and the organiza-tional culture within which they work Therehas been considerable work on the situationaland psychological factors supportive of inno-vation in organizations Indeed it has beenwidely demonstrated that the perceived workenvironment (comprising both structural andcultural elements) does make a difference tothe level of innovation in organizations (Ama-bile et al 1996 Ekvall 1996) Creative andinnovative behaviours appear to be promotedby work environment factors (Mathisen andEinarsen 2004) Indeed it is clear that organ-izations can create environments in whichinnovation can be encouraged or hampered(Dougherty and Cohen 1995 Tidd et al1997) A common theme is that of the poly-chronic organization ndash one with the capacityto be in two states at once (Becker andWhisler 1973) Shepard (1967) describes thisas a two-state organization manoeuvreingbetween loose and tight and Mitroff (1987)as business-as-usual versus business-not-as-usual More prosaically this means organiza-tions need to be able for example to providesufficient freedom to allow for the explorationof creative possibilities but sufficient controlto manage innovation in an effective and effi-cient fashion
Ernst (2002) specifies a range of genericcharacteristics for the dedicated project groupassigned the innovation task multidisciplinarity
copy Blackwell Publishing Ltd 2006 33
March 2006
dedicated project leader inter-functional com-munication and co-operation qualificationsand know-how of the project leader teamautonomy and responsibility for the processAnd these factors are echoed throughout theliterature Rothwell (1992) refers to them aslsquocorporate conditionsrsquo Chiesa et al (1996)lsquoenabling processesrsquo and OrsquoReilly and Tushman(1997) lsquonorms for innovation and changersquoHowever despite their perceived importancethere is little guidance on how to measurethem
Volberda (1996) developed a conceptualmodel of alternative flexible organizationalforms that are argued to initiate or respondbetter to different types of competition Yet inspite of its importance there is relatively littleevidence of extant measures of flexibility inthe literature Rothwell (1992) and Ekvall(1996) propose a range of foci for measures oforganizational and production flexibility suchas lsquocorporate flexibility and responsiveness tochangersquo Coughlan (1994) considers the flexi-bility of resource allocation Several measuresof personnel flexibility are evident such aslsquothe adaptiveness of RampD personnel to tech-nology changesrsquo (Lee et al 1996) and lsquothewillingness to try new procedures and toexperiment with change so as to improve asituation or a processrsquo (Abbey and Dickson1983) At the level of the firm Liao et al(2003) introduce a similar construct ndash lsquoorgan-izational responsivenessrsquo
Organizational complexity the amount ofspecialization and task differentiation report-edly have a positive relationship (Damanpour1996) though Wolfe (1994) argues that it mayfavour initiation at the expense of implemen-tation Administrative intensity that is theratio of managers to total employees favoursadministrative innovation (Damanpour 19911996) but possibly at the cost of other pro-duct or technological innovations (Doughertyand Hardy 1996) Centralization the concen-tration of decision-making authority at the topof the organizational hierarchy and formaliza-tion the degree of emphasis on following rulesand procedures in role performance have both
been shown to have a negative impact on organ-izational innovation (Burns and Stalker 1961Damanpour 1991) Indeed rigidity in rulesand procedures may prohibit organizationaldecision-makers from seeking new sources ofinformation (Vyakarnam and Adams 2001)
Underlying the concept of the workplaceenvironment are issues related to the manage-ment of human resources and the creation ofa culture or climate in which individuals per-ceive innovation to be a desired and supportedorganizational objective There has been con-siderable empirical work on organizationalclimates supportive of the innovation processand several measurement instruments havebeen developed which Mathisen and Einarsen(2004) review The Team Climate Inventory(TCI) (Anderson and West 1996 1998) andthe KEYS instrument for assessing the workenvironment for creativity (Amabile et al 1996)have been found to be robust and rigorous
The TCI has been applied and validated inseveral studies (Agrell and Gustafson 1994Anderson and West 1998 Kivimaumlki et al1997 West and Anderson 1996) Replicationstudies using the TCI have found it canexplain a large part of the variance in teamsrsquoinnovative performance (Agrell and Gustafson1994) The TCI is based around four mainfactors participative safety (how participativeis the team in decision-making proceduresand how psychologically secure do teammembers feel about proposing new andimproved ways of doing things) support forinnovation (the degree of practical support forinnovation attempts contrasted with the rheto-ric of professed support by senior manage-ment) vision (how clearly defined sharedattainable and valued are the teamrsquos objectivesand vision) and task orientation (the com-mitment of the team to achieve the highestpossible standards of task performance includ-ing the use of constructive progress monitor-ing procedures) (Anderson and West 1996)Kivimaumlki et al (1997) suggested a fifth factorlsquointeraction frequencyrsquo relating to the regularityof contact and communication within theproject team
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Innovation management measurement A review
There is general agreement about theimportance of individual and group autonomyin the innovation process (Amabile 1998)Zien and Buckler (1997) emphasize the needfor freedom to experiment and the creation ofsafe havens without which innovation out-come might be constrained Measures ofautonomy mix both qualitative and quantita-tive approaches For example lsquothe degree offreedom personnel have in day-to-day operat-ing decisions such as when to work andhow to solve job problems including freedomfrom constant evaluation and close supervi-sionrsquo (Abbey and Dickson 1983) or lsquopercent-age of RampD portfolio with explicit businessunit andor corporate business managementsign-offrsquo (Tipping and Zeffren 1995) Addition-ally several authors have proposed generalmeasures of autonomy such as lsquofreedom tomake operating decisionsrsquo (Abbey and Dick-son 1983) or lsquodegree of empowermentrsquo (deLeede et al 1999 Tipping and Zeffren1995)
Morale and motivation are dimensions ofthe innovative organization that can be meas-ured as they pertain to individuals ndash lsquotheextent to which personnel are well rewardedrsquo(Abbey and Dickson 1983) to groups ndash lsquoourreward system is more group-based thanindividual-basedrsquo (Parthasarthy and Hammond2002) and to the organization as a whole ndashlsquothe degree to which the organization attemptsto excelrsquo (Abbey and Dickson 1983) Aspectsof morale and motivation that have beenmeasured include trust (Miller and Friesen1982) and job satisfaction which has beenmeasured by Keller (1986) on a 20-item scale
Organizational culture may include a sharedvision and it has been argued that the clearerthe vision the more effective it is as a facilitatorof innovation as it enables focused develop-ment of new ideas that can be assessed moreprecisely (West 1990) Pinto and Prescott(1988) found that the only factor to have pre-dictive power in terms of potential for successat all stages of the innovation process (con-ception planning execution and termination)was having a clearly stated missionvision
while West (1990) contends that the quality ofinnovation is partly a function of visionKeller (1986) adopts Kirtonrsquos (1976) 32-itemadopterndashinnovator inventory to determineindividual and team orientation to innovationVision is operationalized in the team climateinventory (cf Agrell and Gustafson 1994Anderson and West 1996 1998 West andAnderson 1996) and is deconstructed into aseries of sub-dimensions such as clarity shared-ness attainability and value with regard toteam objectives
Another aspect of culture is the propensityto take risks Saleh and Wang (1993) describethis as a willingness to confront risky oppor-tunities and tolerate failure and learn fromdoing so rather than recklessly gamblingSimilarly West (1990) demonstrated thathigher levels of participative safety facilitateinnovation Participative safety is non-judgmental supportive and characterized bysocio-emotional cohesiveness The attractive-ness of the organization as a place to workand undertake innovative activities is used byGeisler (1995) as an indicator of the climatefor innovation measured by numbers of can-didates applying for positions and the ageprofile of scientists and engineers Keller(1986) offers a slightly different perspectiveon participative safety with the constructlsquogroup cohesivenessrsquo which he operational-izes using an established five-item measure
This review has described a wide variety ofmeasures proposed for organizational cultureand structure Unlike some other aspects ofinnovation management this area has receivedextensive measurement attention HoweverHolbek (1988) argues that innovating organi-zations must adopt contrasting structures andclimates as they move from the initiation tothe implementation stages of innovationChesborough and Teece (1996) and Burns andStalker (1961) argue that there is a relation-ship between organizational design and typeof innovation It is a significant gap in innova-tion measurement that there appears to be nomeasures that adequately capture or articulatethis sense of structural shift
copy Blackwell Publishing Ltd 2006 35
March 2006
Portfolio Management
The importance of portfolio management tosuccessful product innovation has recentlyemerged as a key theme in the literature Itis important because of the rapidity at whichresources are consumed in the innovationprocess and the need for these to be managed(Cebon and Newton 1999) The effectivenesswith which an organization manages its RampDportfolio is often a key determinant of itscompetitive advantage (Bard et al 1988) Thefocus of portfolio management is on makingstrategic technological and resource choicesthat govern project selection and the futureshape of the organization (Cooper et al 1999)The problems of allocation of resources evalu-ation selection and termination of projects inachieving the optimal portfolio have beenextensively investigated The models all havethe objective of devising means to allocateresources to projects to obtain the optimalbalance in the product development portfoliothat is arriving at a portfolio that optimizesthe trade-off between returns and risks
The process of selecting innovation projectsrequires evaluation and resource allocationunder uncertain conditions It is argued that asystematic process guided by clear selectioncriteria can help optimize the use of limitedresources and enhance an organizationrsquoscompetitive position (Hall and Nauda 1990)The earliest models used return on investmentas the primary decision criteria (Bard et al 1988)Following this increasingly sophisticatedmathematical tools were developed to resolvewhat Schmidt and Freeland (1992) describe asthe constrained optimization problem that isto maximize the output (according to specifiedcriteria) from a subset of available inputsThese project selection models lsquohave beenvirtually ignored by industryrsquo (Schmidt andFreeland 1992 190) Part of the reason forthis is the inherent complexity of some ofthese models but also that they fail to takeinto account organizational decision andcommunication processes More recentlymodels have tried to take account of these
more qualitative factors involved in decisionprocesses
Scoring models require respondents tospecify the merit of any project proposalaccording to a set of a priori criteria whichmay be objective or subjective (Hall andNauda 1990) Economic and benefit modelsattempt to compute the cost benefit or finan-cial risk of pursuing a specific project whilemathematical programming approaches seekto optimize some objective function(s) subjectto specified resource constraints Algorithmsof varying complexity exist requiring moni-toring and significant data entry and whilemany are conceptually attractive surveys donot show widespread utilization of thesetechniques (Hall and Nauda 1990) Theseapproaches are all based on financial meas-ures such as internal rate of return net presentvalue and return on investment At the otherend of the spectrum qualitative approachessuch as peer review and mental checklistsrely on subjective perceptions and measuresof portfolio balance (Cooper et al 2001Henriksen and Traynor 1999)
Cooper et al (1999) find that best performersuse explicit formalized tools and consist-ently apply them to all projects considered tobelong to a portfolio A series of measures canbe identified that evaluate the whole portfolioof innovation projects to answer questionssuch as lsquois it balanced in terms of quantity ofshort- and long term-projectsrsquo and lsquois there abalance between high and low risk projectsand large and small projectsrsquo (Brenner 1994Cooper et al 2001) Another set seeks to iden-tify the extent to which portfolio evaluationmeasures are formalized within the organiza-tionrsquos processes (Cebon and Newton 1999Chiesa et al 1996 Farrukh et al 2000 Millerand Friesen 1982) Yet another approach is toview project evaluation and selection as anorganizational capability and attempt to deter-mine a level of proficiency (Szakonyi 1994)Finally there is a series of post hoc measuresof the appropriateness of project selections inthe light of results and alignment with busi-ness objectives (Lee et al 1996)
36 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Project Management
Project management is concerned with theprocesses that turn the inputs into a marketa-ble innovation The innovation process iscomplex comprising a myriad of events andactivities some of which can be identified as asequence and some of which occur concur-rently and it is clearly possible that innova-tion processes will differ to some degreeacross organizations and even within organi-zations on a project-by-project basis Havingan efficient process that is able to manage theambiguity of the innovation is universally agreedto be critical to innovation (Globe et al 1973)
Various approaches have been taken tomodelling innovation processes as a series ofevents (Zaltman et al 1973) as a social interac-tion (Voss et al 1999) as a series of transactions(Nelson and Winter 1982) and as a process ofcommunication (Farrukh et al 2000) The his-tory of project management research is partlycharacterized by a debate regarding the extentto which events and activities within the processoccur in linearly sequential discrete identifiablestages (Zaltman et al 1973) or whether eventsare more disorganized (King 1992) or evenchaotic (Koput 1997) However despite thesedifferent viewpoints there are a number ofcommon elements that can be summarized asthe major components of the innovation projectmanagement These are project efficiencytools communications and collaboration
Several studies make efforts to measureproject management efficiency mostly in theform of comparisons between budget and actual(project costs project duration revenue fore-casting) Another measure of project manage-ment success is speed Innovation speed hasbeen positively correlated with product qual-ity or the degree to which it satisfies customerrequirements measures include speed (Hauserand Zettelmeyer 1997) performance againstschedule (Chiesa and Masella 1994) and dura-tion of the process (Cebon and Newton 1999)
To achieve efficiency it is widely recom-mended that organizations seeking to innovateshould establish formal processes for innovat-
ing and make use of tools and techniquesthat may facilitate innovative endeavours Thestage-gate process (Cooper 1990) is possiblythe most familiar of these but other method-ologies for innovation project managementexist including Phased Development Productand Cycle-time Excellence and Total Design(see Jenkins et al (1997) for a discussion)These methodologies have in common theseparation of the product development processinto structured and discrete stages which eachhave milestones in the form of quality controlcheckpoints at which stopgo decisions are madewith regard to the progress of the project Thesehighly structured approaches to the manage-ment of the innovation process began toemerge in the 1990s (Veryzer 1998) The useof structured tools and processes can bemeasured by project process evaluations forexample the use of a formal problem-findingproblem-solving cycle (Bessant 2003) the useof formal post-launch evaluation procedures(Atuahene-Gima 1995) or the use of certifiedprocesses (Chiesa et al 1996) These rathergeneral process measures have been supple-mented by measures of the use of specificinstruments and tools such as interactiveCAD or CAM (Maylor 2001) or the use ofcomputer-integrated manufacturing processes(Parthasarthy and Hammond 2002) but wenote that these measures betray the technologicaland NPD heritage that underpins many of theinnovation measures identified in this reviewEquivalents for service industry public ornot-for-profit sector innovations are somewhatlacking in the literature and constitute aresearch gap
Communications are important in projectmanagement Damanpour (1991) demon-strated the existence of a positive relationshipbetween internal communication and innova-tion Internal communication facilitates thedispersion of ideas within an organizationincreases the diversity and also contributes tothe team lsquoclimatersquo Communication can bemeasured by various integration mechanismseg committees numbers of meetings andcontacts (Damanpour 1991) There are also
copy Blackwell Publishing Ltd 2006 37
March 2006
measures of external communications whichtend to focus on whether communication istaking place the level at which it occurs andwith whom (Cebon and Newton 1999 Leeet al 1996 Rothwell 1992 Souitaris 2002)These measures of internal and external com-munication in the literature are based on bothsubjective evaluations and objective frequencycounts Subjective measures include lsquowe alwaysconsult supplierscustomers on new productideasrsquo (Parthasarthy and Hammond 2002) andlsquodegree of organization members involved andparticipating in extra-organizational professionalactivitiesrsquo (Damanpour 1991) Objective countsinclude (Damanpour 1991) lsquoextent of commu-nication amongst organizational units or groupsmeasured by various integrating mechanismssuch as numbers of committees and frequencyof meetingsrsquo (Anderson and West 1998)lsquofrequency of formal meetings concerningnew ideasrsquo (Souitaris 2002 Szakonyi 1994)lsquohow well do the technical and finance peoplecommunicate with one anotherrsquo
It is widely recognized that collaboratingwith suppliers (Bessant 2003) and customers(von Hippel 1986) can also make a significantcontribution to the innovation processMeasures of collaborative working includethe use of guest engineers (Maylor 2001) thepercentage of projects in co-operation withthird parties (Kerssens-van Drongelen andBilderbeek 1999) and the extent to whichdecision-making at top levels is characterizedby cross-functional discussions (Miller andFriesen 1982) In addition Jassawalla andSashittal (1999) identify some characteristicsof internal collaboration ie that teams arecharacterized by their mindfulness levels ofat-stakeness synergy and transparency butthey do not suggest how these aspects mightbe measured which constitutes a furtherresearch gap
Commercialization
Commercialization can be considered to bethe second of the two phases in Zaltman et alrsquos(1973) conceptualization of the innovation
process that is lsquoimplementationrsquo This canmean taking an innovation to market (Chakra-vorti 2004) but may also include convincingproduction managers to adopt a series of newtechniques available to them (Single andSpurgeon 1996) Indeed the successful intro-duction of new products and services intomarkets is important for the survival andgrowth of organizations Kelm et al (1995)regard commercialization as a transitionalphase in which the organization becomesless reliant on its technological capabilities(important during the activities of initiation)but more dependent on market dynamicsCommercialization is concerned with makingthe innovative process or product a commer-cial success it includes issues such as market-ing sales distribution and joint venturesWhile technical capabilities are important forthe early stages of the innovation process anddevelopment activities for the launch andimplementation stage it is marketing capabili-ties (market investigation market testingpromotion etc) that are significant (Calantoneand di Benedetto 1988 Globe et al 1973)Verhaeghe and Kfir (2002) consider aspectsof commercialization under the headings ofmarket analysis and monitoring reaching thecustomer and market planning
Firm-level measures of the launch or com-mercialization process appear to be relativelythin In their description of the RampD processBalachandra and Brockhoff (1995) character-ize the commercialization stage as requiringlsquobig bucksrsquo market reviews and organiza-tional commitment Most measures appear tobe not much more sophisticated than thisMeasures are frequently restricted to numbersof products launched in a given period (egYoon and Lilien 1985) There is thoughsome focus on market analysis and monitor-ing (Verhaeghe and Kfir 2002) Song andParry (1996) employ a set of measures oflaunch proficiency (salesforce distributionaland promotional support) that directly addressthe lsquoadequacyrsquo of the organizationrsquos facilities inthese areas as do Avlonitis et al (2001) Andthere is a limited mention of the commercial
38 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
intentions of an organizationrsquos competitors(Calantone and di Benedetto 1988) Thethemes of proficiency of personnel in this area(eg Atuahene-Gima 1995 Cebon and New-ton 1999) of adherence to a commercializa-tion schedule (eg Griffin and Page 1993) andof formal post-launch reviews (Atuahene-Gima 1995 von Zedtwitz 2002) can also befound in the literature
Even in the work that addresses post-project reviews very little attention is directedtowards measuring innovation launch orcommercialization However this comes aslittle surprise as Hultink et al (2000) recentlyobserved that little work has been done in thearea perhaps because at least in the innova-tion literature launch activities appear to beconsidered the domain of other specialistsparticularly marketers and the process is seenas separate from innovation In their studythey investigated launch decisions associatedwith success for consumer and business-to-business products Much of the literature thatconsiders launch and commercialization doesso from the viewpoint of the adopter andassesses rates of adoption and diffusion ofinnovations over time across populations(Kessler and Chakrabarti 1996 Van DenBulte 2000)
The area of commercialization appears tobe the least developed of the issues involvedin innovation management This is a huge gapbecause without this last step the previoussteps of assembling inputs project manage-ment etc will not result in a commerciallyviable outcome for the firm We believe thatthis area of innovation is in urgent need offurther development from both theory andmeasurement viewpoints
Discussion
Innovation management measurement is acritical discipline for both academics andpractitioners The capacity of organizations toinnovate is determined by multiple factors thatrelate both to their own internal organizationand to their market environment (Rothwell
et al 1974) and the task of generating andthen converting ideas into usable and market-able products requires high levels of inter-functional co-ordination and integration Thispaper opened with the general observationthat innovation measurement does not appearto take place routinely within managementpractice and that where it does it tends tofocus on output measures Further from therelatively small number of empirical studiesof measurement in practice measurement ofinnovation management appears to be under-taken infrequently in an ad hoc fashion andrelies on dated unbalanced or under-specifiedmodels of the innovation management phe-nomenon This suggests that a large part ofthe contemporary conceptualization of theinnovation management phenomenon is over-looked in practitionersrsquo measurement prac-tices and consequently that opportunities forthe more efficient and effective managementof the innovation process are not realizedSome possible reasons for this state of affairsare failure of academics to communicate ade-quately inconsistency inaccessibility andcomplexity of measures and poor synthesisand packaging
Following a review and synthesis of theliterature we proposed a seven-dimensionalconceptualization of the innovation manage-ment phenomenon and applied it to an exam-ination of the measurement problem Throughthe application of this framework to their ownparticular context it is suggested that practi-tioners will be able to conduct an evaluationof their own innovation management activityidentify gaps weaknesses or deficiencies andalso improvement potential Further it ishoped that organizations applying the frame-work will be able to tease out areas whereinnovation is only nominally adopted in theirprocesses and identify areas where attentionand resources might be focused
From the perspective of its management itis no longer sufficient to treat innovation as alinear process where resources are channelledat one end from which emerges a new prod-uct or process The measurement framework
copy Blackwell Publishing Ltd 2006 39
March 2006
presented in Table 2 shows the breadth andvariety of elements of innovation managementthat ideally need to be measured There havebeen several studies that have investigated thelimitations of various approaches to measure-ment (eg Werner and Souder 1997) and ofspecific measures (eg Trajtenberg 1990) asthey relate to the practice of innovation Thechoice of an appropriate RampD measurementmetric depends on the userrsquos needs in terms ofcomprehensiveness of measurement type ofRampD being measured available data andamount of effort the user can afford to allocateto the exercise Nonetheless the commonciting across various papers of the measuresnoted in the innovation management frame-work presented here suggests that a base setof innovation management measures isimplicitly present in the literature eventhough they may be fragmented in appearanceand presentation By pulling together theinnovation management framework fromdiverse sources this paper aims to bring suchissues into the open and identify relevantresearch gaps Table 2 can be viewed as thebasis for a balanced scorecard (Kaplan andNorton 1992) for innovation managementthat is as a balanced set of areas that need tobe measured in order to gain insight into anorganizationrsquos holistic ability to manage inno-vation Such multidimensional approaches tomeasurement have been found in other areasof management to be an improvement on sim-ple one-dimensional measures and to be ableto capture both short- and long-term aspectsof value creation in the firm (Phelps 2004)
We have identified a large number of meas-ures and approaches in a variety of innovationmanagement areas and we have constructed ageneric set of innovation management meas-urement areas to act as a framework for bal-anced measurement However in several ofthese areas measurement gaps have beenidentified These gaps are of two types valid-ity gaps and omission gaps Validity gaps arisewhere there is insufficient evidence that pro-posed measures actually do capture drivers oroutputs of innovation management for example
we have noted the objections to counts ofpatents or increasing expenditure on RampD beingused as measures of innovative organizationsSimilarly there is an absence of evidence thatthe large number of subjective perceptions ofinnovation management practices proposed(lsquowe do Arsquo lsquowe are good at Brsquo) actually relateto innovation management performance
Omission gaps occur where the importanceof an aspect of innovation management is sup-ported in the literature but measures for thisaspect are lacking Omission gaps are particu-larly prevalent in the elements of innovationmanagement such as knowledge managementinnovation strategy and commercializationthat do not feature strongly in the literature ontechnological and manufacturing-based inno-vation Another area traditionally not givenmuch emphasis in this literature is organiza-tion and culture which fortunately is bettertreated by the organizational behaviour litera-ture where a number of measures have beendeveloped Much of the current state of meas-urement practice can be traced back to the dis-ciplinersquos early manufacturing RampD and NPDfocus While product innovation is undoubt-edly important it is only one dimension of anorganizationrsquos innovation agenda Process andorganizational innovations are recognizedtoo as critical for competitiveness yet theseperspectives are inadequately represented inmeasurement terms
General areas of omission in this fieldrelate to an over-reliance on financial meas-ures rather than process measures for exam-ple the use of financial measures of portfoliooptimization but an absence of portfoliocapability measures a similar reliance oncodified knowledge such as patents to theexclusion of more intangible measures suchas tacit knowledge the measurement of levelsof resources or activities with no indication ofwhat an optimal level would be the measure-ment of drivers of innovation without meas-ures of whether these drivers are aligned witheach other and with firm strategy measures ofpresence that do not measure quality (eg theuse of dichotomous (yesno) measures that do
40 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
not indicate how well an action is implementedand measures of the presence of leadership(such as champions) but not of quality ofleadership) a general absence of measuresfor important properties of organizationalstructures such as flexibility and a lack ofmeasures of the match between structure andenvironment a technological and NPD bias toproject management measures and a relativeabsence of measures for service sectors apaucity of measures for internal communica-tions and a general lack of measures forcommercialization management ndash in particulararound marketing and sales capabilities forinnovative products and services All thesegaps provide the potential for further researchin innovation management measurement
The absence of an accepted framework ofinnovation management measures leads notonly to the gaps identified above but also toother problems in the literature One is that itis frequently unclear whether or not the met-rics used are of the researchersrsquo own devisingdrawn from the literature or are what are usedby the organizations being studied Nor is italways clear when metrics are devised orrecommended whether they are intended foruse in a research capacity or for managementtasks Further the measures proposed in theliterature often seem to be proposed abstractlywith little consideration given to the use ofmeasures as a management tool in the day-to-day context of managing innovation In theabsence of a comprehensive framework forinnovation management measurement organ-izations will inevitably resort to ad hoc andpartial metrics which can encourage wastefulpractice (eg measuring innovation managementcapability according to annual RampD spend)We hope that the framework constructed inthis paper will be useful in the constructionof comprehensive measures of innovationmanagement
Acknowledgements
The research reported here was supported bya grant from Cranfield School of Management
the authors gratefully acknowledge this supportFurther the authors are grateful to the editorsand two anonymous reviewers for their helpfuland insightful comments on previous versionsof this paper
Note
1 Corresponding author Telephone +44 (0) 207594 9137 e-mail radamsimperialacuk
References
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Agrell A and Gustafson R (1994) The teamclimate inventory (TCI) and group innovation apsychometric test on a Swedish sample of workgroups Journal of Occupational and Organiza-tional Psychology 67 143ndash151
Alegre-Vidal J Lapiedra-Alcami R and Chiva-Gomez R (2004) Linking operations strategy andproduct innovation an empirical study of Spanishceramic tile producers Research Policy 33 829ndash839
Amabile TM (1998) How to kill creativity HarvardBusiness Review SeptemberndashOctober 77ndash87
Amabile TM Conti R Coon H Lazenby J andHerron M (1996) Assessing the work environ-ment for creativity Academy of Management Jour-nal 39 1154ndash1184
Ambrosini V and Bowman C (2001) Tacit know-ledge some suggestions for operationalisationJournal of Management Studies 38 811ndash829
Anderson N and West MA (1996) The teamclimate inventory development of the TCI and itsapplications in teambuilding for innovativenessEuropean Journal of Work and Organizational Psy-chology 5 53ndash66
Anderson NR and West MA (1998) Measuringclimate for work group innovation developmentand validation of the team climate inventory Jour-nal of Organizational Behavior 19 235ndash258
Atuahene-Gima K (1995) An exploratory analysisof the input of market orientation on new productperformance a contingency approach Journal ofProduct Innovation Management 12 275ndash293
Avlonitis GJ Papastathopoulou PG and Gounaris SP(2001) An empirically-based typology of productinnovativeness for new financial services success
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March 2006
and failure scenarios Journal of Product Innova-tion Management 18 324ndash342
Balachandra R and Brockhoff K (1995) Are RampDproject termination factors universal Research-Technology Management 38 31ndash36
Balachandra R and Friar J (1997) Factors for suc-cess in RampD projects and new product innovationa contextual framework IEEE Transactions onEngineering Management 44 276ndash287
Baldridge JV and Burnham RA (1975) Organiza-tional innovation ndash individual organizational andenvironmental impacts Administrative ScienceQuarterly 20 165ndash176
Bantel KA and Jackson SE (1989) Top manage-ment and innovations in banking does the compo-sition of the top team make a difference StrategicManagement Journal 10 107ndash124
Barclay I (1992) The new product developmentprocess part 2 Improving the process of new prod-uct development RampD Management 4 307ndash317
Bard JF Balachandra R and Kaufmann PE(1988) An interactive approach to RampD projectselection and termination IEEE Transactions onEngineering Management 35 139ndash146
Barney J (1991) Firm resources and sustained com-petitive advantage Journal of Management 1799ndash120
Becker SW and Whisler TL (1973) The innova-tive organization a selective view of current theoryand research In Wills G Hayhurst R and Midg-ley D (eds) Creating and Marketing New Prod-ucts London Crosby Lockwood Staples
Bess G (1998) A first stage organization life cyclestudy of six emerging nonprofit organizations inLos Angeles Administration in Social Work 2235ndash52
Bessant J (2003) High Involvement InnovationBuilding and Sustaining Competitive AdvantageThrough Continuous Change Chichester JohnWiley
Bessant J and Francis D (1997) Implementing thenew product development process Technovation17 189ndash197
Blackler F (1995) Knowledge knowledge work andorganizations an overview and interpretationOrganization Studies 16 1021ndash1046
Bougrain F and Haudeville B (2002) Innovationcollaboration and SMEs internal research capaci-ties Research Policy 31 735ndash747
Brenner MS (1994) Practical RampD project prioriti-zation Research Technology Management 37 38ndash43
Brown MG and Svenson RA (1988) MeasuringRampD productivity Research-Technology Manage-ment JulyndashAugust 11ndash15
Brown SL and Eisenhardt KM (1997) The art ofcontinuous change linking complexity theory andtime-paced evolution in relentlessly shifting organiza-tions Administrative Science Quarterly 42 1ndash34
Burgelman RA Christensen CM and Wheel-wright SC (2004) Strategic Management of Tech-nology and Innovation 4th edition New YorkMcGraw HillIrwin
Burns TR and Stalker GM (1961) The Manage-ment of Innovation London Tavistock
Calantone RJ and di Benedetto CA (1988) Anintegrative model of the new product developmentprocess an empirical validation Journal of Prod-uct Innovation Management 5 201ndash215
Cebon P and Newton P (1999) Innovation in firmstowards a framework for indicator developmentMelbourne Business School Working Paper 99-9
Chakravorti B (2004) The new rules for bringinginnovations to market Harvard Business Review82 58ndash67
Chen C-J (2004) The effects of knowledgeattribute alliance characteristics and absorptivecapacity on knowledge transfer performance RampDManagement 34 311ndash321
Chesborough HW and Teece DJ (1996) When isvirtual virtuous Organizing for innovation Har-vard Business Review JanuaryndashFebruary 65ndash73
Chiesa V and Masella C (1994) Searching for aneffective measure of RampD performance In Pro-ceedings 2nd International Product DevelopmentManagement Conference Gothenburg Sweden30ndash31 May Brussels European Institute forAdvanced Studies in Management
Chiesa V Coughlan P and Voss A (1996) Devel-opment of a technical innovation audit Journal ofProduct Innovation Management 13 105ndash136
Cohen WM and Levinthal DA (1990) Absorptivecapacity a new perspective on learning and inno-vation Administrative Science Quarterly 35 128ndash152
Cooper RG (1979a) The dimensions of industrialnew product success and failure Journal of Mar-keting 43 93ndash103
Cooper RG (1979b) Identifying industrial newproduct success Project NewProd Industrial Mar-keting Management 8 124ndash135
Cooper RG (1984) The strategyndashperformance linkin product innovation RampD Management 14 247ndash259
42 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Cooper RG (1990) Stage-gate systems a new toolfor managing new products Business Horizons 3344ndash56
Cooper RG and Kleinschmidt EJ (1990) Newproduct success factors a comparison of lsquokillsrsquoversus successes and failures RampD Management20 47ndash64
Cooper RG and Kleinschmidt EJ (1995) Bench-marking the firmrsquos critical success factors in newproduct development Journal of Product Innova-tion Management 12 374ndash391
Cooper RG Edgett SJ and Kleinschmidt EJ(1999) New product portfolio management prac-tices and performance Journal of Product Innova-tion Management 16 333ndash351
Cooper RG Edgett SJ and Kleinschmidt EJ(2001) Portfolio Management for New Products2nd edition Cambridge MA Perseus
Cooper RG Edgett SJ and Kleinschmidt EJ (2004)Benchmarking best NPD practices Research-Technology Management 47 50ndash59
Cordero R (1990) The measurement of innovationperformance in the firm an overview ResearchPolicy 19 185ndash192
Cormican K and OrsquoSullivan D (2004) Auditingbest practice for effective product innovationmanagement Technovation 24 819ndash829
Coughlan P Chiesa V and Voss C (1994) Evalu-ating leadership as an enabler of innovation InProceedings 2nd International Product Develop-ment Management Conference GothenburgSweden 30ndash31 May Brussels European Institutefor Advanced Studies in Management
Covin JG and Slevin DP (1989) Strategic manage-ment of small firms in hostile and benign environ-ments Strategic Management Journal 10 75ndash87
Daft R (1978) A dual-core model of organizationalinnovation Academy of Management Journal 21193ndash210
Damanpour F (1991) Organizational innovation ameta-analysis of effects of determinants and mod-erators Academy of Management Journal 34 555ndash590
Damanpour F (1996) Organizational complexity andinnovation developing and testing multiple contin-gency models Management Science 42 693ndash716
Davis MC (1998) Knowledge management Infor-mation Strategy The Executiversquos Journal 15 11ndash22
De Brentani U (1991) Success factors in developingnew business services European Journal of Mar-keting 25 33ndash60
De Leede J Nijhof AH and Fisscher OA (1999)The myth of self managing teams a reflection onthe allocation of responsibilities between individu-als teams and the organisation Journal of BusinessEthics 21 203ndash215
Deeds DL (2001) The role of RampD intensitytechnical development and absorptive capacity increating entrepreneurial wealth in high technologystart-ups Journal of Engineering and TechnologyManagement 18 29ndash47
Denyer D and Neely A (2004) Introduction to spe-cial issue innovation and productivity performancein the UK International Journal of ManagementReviews 45 131ndash135
Di Benedetto CA (1996) Identifying the key suc-cess factors in new product launch Journal ofProduct Innovation Management 16 530ndash544
Dodgson M and Hinze S (2000) Indicators used tomeasure the innovation process defects and possi-ble remedies Research Evaluation 8 101ndash114
Dougherty D and Cohen M (1995) Product inno-vation in mature firms In Bowman E and KogutB (eds) Redesigning the Firm New York OxfordUniversity Press
Dougherty D and Hardy C (1996) Sustained prod-uct innovation in large mature organizations over-coming innovation-to-organization problemsAcademy of Management Journal 39 1120ndash1153
DTI (1998) An Audience With Innovation Innovationin Management London Department of Trade andIndustry
Dyer B and Song XM (1998) Innovation strategyand sanctioned conflict a new edge in innovationJournal of Product Innovation Management 15505ndash519
Ekvall G (1996) Organizational climate for creativ-ity and innovation European Journal of Work andOrganizational Psychology 5 105ndash123
Ernst H (2002) Success factors of new productdevelopment a review of the empirical literatureInternational Journal of Management Reviews 41ndash40
Farrukh C Phaal R Probert D Gregory M andWright J (2000) Developing a process for therelative valuation of RampD programmes RampDManagement 30 43ndash53
Frenkel A Maital S and Grupp H (2000) Meas-uring dynamic technical change a technometricapproach International Journal of TechnologyManagement 20 429ndash441
Galunic DC and Rodan S (1998) Resource recom-binations and the firm knowledge structures and
copy Blackwell Publishing Ltd 2006 43
March 2006
the potential for Schumpeterian innovationStrategic Management Journal 19 1193ndash1201
Geisler E (1995) An integrated costndashperformancemodel of research-and-development evaluationOmega ndash International Journal of ManagementScience 23 281ndash294
Glaser BG and Strauss AL (1967) The Discoveryof Grounded Theory Strategies for QualitativeResearch London Aldine
Globe S Levy GW and Schwartz CM (1973)Key factors and events in the innovation processResearch Management 16 8ndash15
Goffin K and Pfeiffer R (1999) Innovation Man-agement in UK and German Manufacturing Com-panies London Anglo-German Foundation for theStudy of Industrial Society
Grant RM (1991) The resource-based theory ofcompetitive advantage implications for strategyformulation California Management Review 33114ndash135
Greve HR (2003) A behavioral theory of RampDexpenditures and innovations evidence fromshipbuilding Academy of Management Journal 46685ndash702
Griffin A (1997) PDMA research on new productdevelopment practices updating trends and bench-marking best practices Journal of Product Innova-tion Management 14 429ndash458
Griffin A and Page AL (1993) An interim reporton measuring product development success andfailure Journal of Product Innovation Manage-ment 10 291ndash308
Griliches Z (1990) Patent statistics as economicindicators a survey Journal of Economic Litera-ture 28 1661ndash1707
Hall DL and Nauda A (1990) An interactiveapproach for selecting IRampD projects IEEE Trans-actions on Engineering Management 37 126ndash133
Hauser JR and Zettelmeyer F (1997) Metrics toevaluate RDampE Research-Technology Manage-ment 40 32ndash38
Henriksen AD and Traynor AJ (1999) A practicalRampD project-selection scoring tool IEEE Trans-actions on Engineering Management 46 158ndash170
Hipp C and Grupp H (2005) Innovation in theservice sector the demand for service specific-innovation measurement concepts and typologiesResearch Policy 34 517ndash535
Holbek J (1988) The innovation design dilemmasome notes on its relevance and solutions InGroslashnhaug K and Kaufmann G (eds) Innovation
A Cross-Disciplinary Perspective NorwegianUniversity Press pp 253ndash277
Hope Hailey V (2001) Breaking the mould Innova-tion as a strategy for corporate renewal Inter-national Journal of Human Resource Management12 1126ndash1140
Hull R Coombs R and Peltu M (2000) Know-ledge management practices for innovation anaudit tool for improvement International Journalof Technology Management 20 633ndash656
Hultink EJ Hart S Robben HSJ and Griffin A(2000) Launch decisions and new product successan empirical comparison of consumer and indus-trial products Journal of Product Innovation Man-agement 17 5ndash23
Jassawalla AR and Sashittal HC (1999) Buildingcollaborative cross-functional new product teamsAcademy of Management Executive 13 50ndash63
Jenkins S Forbes S Durrani TS and BanerjeeSK (1997) Managing the product developmentprocess 1 An assessment International Journal ofTechnology Management 13 359ndash378
Kaplan RS and Norton DP (1992) The balancedscorecard ndash measures that drive performance HarvardBusiness Review JanuaryndashFebruary 71ndash79
Keller RT (1986) Predictors of performance ofproject groups in RampD organizations Academy ofManagement Journal 29 715ndash726
Kelm KM Narayanan VK and Pinches GE (1995)Shareholder value creation during research-and-development innovation and commercialization stagesAcademy of Management Journal 38 770ndash786
Kerssens-van Drongelen IC and Bilderbeek J(1999) RampD performance measurement morethan choosing a set of metrics RampD Management29 35ndash46
Kerssens-van Drongelen IC and de Weerd-Nederhof PC (1999) The use of performancemeasurement tools for balancing short- and long-term NPD performance International Journal ofInnovation Management 3 397ndash426
Kessler EH and Chakrabarti AK (1996) Innova-tion speed a conceptual model of context anteced-ents and outcomes Academy of ManagementReview 21 1143ndash1191
Kim B and Oh H (2002) An effective RampD per-formance measurement system survey of KoreanRampD researchers Omega ndash International Journalof Management Science 30 19ndash31
Kim J and Wilemon D (2002) Strategic issues inmanaging innovationrsquos fuzzy front-end EuropeanJournal of Innovation Management 5 27ndash39
44 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Kimberly JR (1981) Managerial innovation InNystrom PC and Starbuck WH (eds) Handbookof Organizational Design Vol 1 New YorkOxford University Press pp 84ndash104
King N (1992) Modelling the innovation process anempirical comparison of approaches Journal ofOccupational and Organizational Psychology 6589ndash100
Kirton MJ (1976) Adaptors and innovators adescription and measure Journal of Applied Psy-chology 61 622ndash629
Kivimaumlki M Kuk G Elovainio M Thomson LKalliomaumlki-Levanto T and Heikkilauml A (1997)The team climate inventory (TCI) ndash four or fivefactors Testing the structure of TCI in samples oflow and high complexity jobs Journal of Occupa-tional and Organizational Psychology 70 375ndash389
Kivimaumlki M Lansisalmi H Elovainio M Heik-kila A Lindstrom K Harisalo R Sipila K andPuolimatka L (2000) Communication as a deter-minant of organizational innovation RampD Man-agement 30 33ndash42
Kleinknecht A (1987) Measuring RampD in smallfirms how much are we missing Journal of Indus-trial Economics 36 253ndash256
Koen P Ajamian G Burkart R Clamen ADavidson J DrsquoAmore R Elkins C Herald KIncorvia M Johnson A Karol R Seibert RSlavejkov A and Wagner K (2001) Providingclarity and a common language to the lsquofuzzy front endrsquoResearch-Technology Management 44 46ndash55
Koput K (1997) A chaotic model of innovativesearch some answers many questions Organiza-tion Science 8 528ndash542
Lawrence PR and Lorsch JW (1967) Organizationand Environment Harvard MA Harvard Univer-sity Press
Lee M Son B and Lee H (1996) Measuring RampDeffectiveness in Korean companies Research-Technology Management 39 28ndash31
Leonard D and Sensiper S (1998) The role of tacitknowledge in group innovation California Man-agement Review 40 112ndash132
Leseure M Birdi K Bauer J Denyer D andNeely A (2004) Adoption of Promising PracticeA Systematic Review of the Literature LondonAdvanced Institute of Management Research
Li HY and Atuahene-Gima K (2001) Productinnovation strategy and the performance of newtechnology ventures in China Academy of Man-agement Journal 44 1123ndash1134
Liao J Welsch H and Stoica M (2003) Organiza-tional absorptive capacity and responsivenessan empirical investigation of growth-orientedSMEs Entrepreneurship Theory and Practice 2863ndash86
Linstone HA and Turoff M (eds) (2002) The Del-phi Method Techniques and Applications httpwwwisnjitedupubsdelphibook
Loch C Stein L and Terwiesch C (1996) Meas-uring development performance in the electronicsindustry Journal of Product Innovation Manage-ment 13 3ndash20
Mathisen GE and Einarsen S (2004) A review ofinstruments assessing creative and innovative envi-ronments within organizations Creativity ResearchJournal 16 119ndash140
Maylor H (2001) Assessing the relationshipbetween practice changes and process improve-ment in new product development Omega ndashInternational Journal of Management Science 2985ndash96
McAdam RMS (1999) The process of knowledgemanagement within organizations a critical assess-ment of both theory and practice Knowledge andProcess Management 6 101ndash113
McManus RJ Wilson S Delaney BC Fitzmau-rice DA Hyde CJ Tobias RS Jowett S andHobbs FDR (1998) Review of the usefulness ofcontacting other experts when conducting a litera-ture search for systematic reviews British MedicalJournal 317 1562ndash1563
Miles RE and Snow CC (1978) Organization StrategyStructure and Process New York McGraw-Hill
Miller D and Friesen PH (1982) Innovation inconservative and entrepreneurial firms two modelsof strategic momentum Strategic ManagementJournal 3 1ndash24
Mintzberg H (1978) Patterns in strategy formationManagement Science 24 934ndash948
Mitroff I (1987) Business Not As Usual Rethinkingour Individual Corporate and Industrial Strategiesfor Global Competition London Jossey-Bass
Moenaert RK De Meyer A Souder WE andDeschoolmeester D (1995) RampDMarketing com-munication during the fuzzy front-end IEEETransactions on Engineering Management 42243ndash257
Neely A and Hii J (1998) Innovation and BusinessPerformance A Literature Review Report producedfor Government Office for the Eastern RegionCambridge The Judge Institute of ManagementStudies University of Cambridge
copy Blackwell Publishing Ltd 2006 45
March 2006
Nelson R and Winter G (1982) An EvolutionaryTheory of Economic Change Cambridge MABelknap Press
Nohria N and Gulati R (1996) Is slack good or badfor innovation Academy of Management Journal39 1245ndash1264
Nonaka I (1991) The knowledge-creating companyHarvard Business Review NovemberndashDecember96ndash104
Nonaka I and Takeuchi H (1995) The KnowledgeCreating Company How Japanese CompaniesCreate the Dynamics of Innovation New YorkOxford University Press
OrsquoBrien JP (2003) The capital structure implica-tions of pursuing a strategy of innovation StrategicManagement Journal 24 415ndash431
OrsquoReilly CA and Tushman ML (1997) Using cul-ture for strategic advantage promoting innovationthrough social control In Tushman ML andAnderson P (eds) Managing Strategic Innovationand Change A Collection of Readings New YorkOxford University Press pp 200ndash216
Oliver N Dewberry E and Dostaler I (1999) Newproduct development performance and practice aninternational benchmarking study in the consumerelectronics industry In Proceedings 6th Inter-national Product Development Management Confer-ence Cambridge UK Brussels European Institutefor Advanced Studies in Management
Pakes A and Griliches Z (1980) Patents and RampDat the firm level a first report Economic Letters 5377ndash381
Parthasarthy R and Hammond J (2002) Productinnovation input and outcome moderating effectsof the innovation process Journal of Engineeringand Technology Management 19 75ndash91
Patterson F (2003) Innovation potential indicatorAvailable at wwwoppcouk
Phelps B (2004) Smart Business Metrics MeasureWhat Really Counts and Manage What Makes theDifference London FT-Prentice Hall
Pinto JK and Prescott JE (1988) Changes in crit-ical success factors over the stages in the projectlife cycle Journal of Management 14 5ndash18
Pitt M and Clarke K (1999) Competing on compe-tence a knowledge perspective on the managementof strategic innovation Technology Analysis andStrategic Management 11 301ndash316
Pittaway L Robertson M Munir K Denyer D andNeely A (2004) Networking and Innovation in theUK a Systematic Review of the Literature LondonAdvanced Institute of Management Research
Porter ME and Ketels CHM (2003) UK Compet-itiveness Moving to the Next Stage DTI Econom-ics Paper No 3 URN 03899
Pugh DS Hickson DJ Hinings CR and TurnerC (1969) The context of organization structuresAdministrative Science Quarterly 14 91ndash114
Ramanujam V and Mensch GO (1985) Improvingthe strategyndashinnovation link Journal of ProductInnovation Management 2 213ndash223
Richard O McMillan A Chadwick K and DwyerS (2003) Employing an innovation strategy inracially diverse workforces ndash effects on firm per-formance Group amp Organization Management 28107ndash126
Rickards T (1991) Innovation and creativity treesand pathways RampD Management 21 97ndash108
Rochford L (1991) Generating and screening newproduct ideas Industrial Marketing Management20 287ndash296
Rothwell R (1992) Successful industrial innovationcritical factors for the 1990s RampD Management22 221ndash239
Rothwell R Freeman C Horseley A JervisVTP Robertson AB and Townsend J (1974)SAPPHO updated ndash Project SAPPHO phase IIResearch Policy 3 258ndash291
Saleh SD and Wang CK (1993) The managementof innovation ndash strategy structure and organiza-tional climate IEEE Transactions on EngineeringManagement 40 14ndash21
Schmidt RL and Freeland JR (1992) Recentprogress in modelling RampD project-selection proc-esses IEEE Transactions on Engineering Manage-ment 39 189ndash201
Schroeder RG Van de Ven AH Scudder GDand Polley D (1989) The development of innova-tion ideas In Van de Ven AH Angle HL andPoole M (eds) Research on the Management ofInnovation The Minnesota Studies New YorkHarper amp Row pp 107ndash133
Scott S and Bruce R (1994) Determinants ofinnovative behaviour a path model of individualinnovation Academy of Management Journal 37580ndash607
Shane S Venkataraman S and MacMillan I (1995)Cultural differences in innovation championingstrategies Journal of Management 21 931ndash952
Shepard HA (1967) Innovation-resisting and inno-vation producing organizations Journal of Busi-ness 40 470ndash477
Shin J and McClomb GE (1998) Top executiveleadership and organizational innovation an
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Innovation management measurement A review
empirical investigation of nonprofit human serviceorganizations (HSOS) Administration in SocialWork 22 1ndash21
Single AW and Spurgeon WM (1996) Creatingand commercializing innovation inside a skunkworks Research-Technology Management 39 38ndash41
Song XM and Parry ME (1996) What separatesJapanese new product winners from losersJournal of Product Innovation Management 13422ndash439
Souitaris V (2002) Firm-specific competenciesdetermining technological innovation a survey inGreece RampD Management 32 61ndash77
Stock GN Greis NP and Fischer WA (2001)Absorptive capacity and new product developmentJournal of High Technology ManagementResearch 12 77ndash91
Sundbo J (1997) Management of innovation inservices Service Industries Journal 17 432ndash455
Sveiby KE (1997) The New Organizational WealthManaging and Measuring Knowledge-BasedAssets San Francisco CA Berrett-Koehler
Szakonyi R (1994) Measuring RampD effectiveness IResearch-Technology Management 37 27ndash32
Thompson L (2003) Improving the creativity oforganizational work groups Academy of Manage-ment Executive 17 96ndash109
Tidd J Bessant J and Pavitt K (1997) ManagingInnovation Integrating Technological Market andOrganizational Change Chichester UK JohnWiley
Tipping J and Zeffren E (1995) Assessing thevalue of your technology ResearchndashTechnologyManagement 38 22ndash40
Trajtenberg M (1990) A penny for your quotes ndashpatent citations and the value of innovations RandJournal of Economics 21 172ndash187
Tranfield D Denyer D and Smart P (2003)Towards a methodology for developing evidence-informed management knowledge by means of asystematic review British Journal of Management14 207ndash222
Tsai W (2001) Knowledge transfer in intraorganiza-tional networks effects of network position andabsorptive capacity on business unit innovation andperformance Academy of Management Journal44 996ndash1004
Van Den Bulte C (2000) New product diffusionacceleration measurement and analysis MarketingScience 19 366ndash380
Verhaeghe A and Kfir R (2002) Managing innovationin a knowledge intensive technology organisation(KITO) RampD Management 32 409ndash417
Verworn B (2002) The fuzzy front end of productdevelopment an exploratory study In Proceedings9th International Product Development ManagementConference Sophia Antipolis France pp 863ndash878Brussels European Institute for Advanced Studiesin Management
Veryzer RW (1998) Discontinuous innovation andthe new product development process Journal ofProduct Innovation Management 15 304ndash321
Volberda HW (1996) Towards the flexible formhow to remain vital in hypercompetitive environ-ments Organizational Science 7 359ndash374
Von Hippel E (1986) Lead users a source of novelproduct concepts Management Science 32 791ndash805
Von Zedtwitz M (2002) Organizational learningthrough post-project reviews in RampD RampD Man-agement 32 255ndash268
Voss C Chase R and Roth A (1999) Internationalservice study Decision Line May 4ndash7
Vyakarnam S and Adams RJ (2001) Institutionalbarriers to enterprise support an empirical studyEnvironment and Planning C Government andPolicy 19 335ndash353
Werner BM and Souder WE (1997) MeasuringRampD performance ndash state of the art Research-Technology Management 40 34ndash42
West MA (1990) The social psychology of innova-tion in groups In West MA and Farr JL (eds)Innovation and Creativity at Work Psychologicaland Organizational Strategies Chichester UKJohn Wiley pp 309ndash333
West MA and Anderson NR (1996) Innovation intop management teams Journal of Applied Psychol-ogy 81 680ndash693
White A (2002) Enabling factors in the front end ofthe innovation process In Proceedings 9thInternational Product Development ManagementConference Sophia Antipolis France BrusselsEuropean Institute for Advanced Studies inManagement pp 879ndash887
Wolfe RA (1994) Organizational innovationreview critique and suggested research direc-tions Journal of Management Studies 31 405ndash431
Yoon E and Lilien GL (1985) A new productlaunch-time decision model Journal of ProductInnovation Management 3 134ndash144
Zahra SA and George G (2002) Absorptivecapacity a review reconceptualization and
copy Blackwell Publishing Ltd 2006 47
March 2006
extension Academy of Management Review 27185
Zaltman G Duncan R and Holbek J (1973) Inno-vations and Organizations New York John Wiley
Zien KA and Buckler SA (1997) From experiencedreams to market crafting a culture of innovationJournal of Product Innovation Management 14274ndash287
Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
copy Blackwell Publishing Ltd 2006 29
March 2006
are reduced measurement approaches becomeincreasingly qualitative and possibly morecostly and time-consuming to deploy Meas-ures imply an assumption that the objective isto generate as many ideas as possible throughthe use of generative tools Several measuresattempt to count the number of ideas gener-ated in a period (cf Chiesa et al 1996 Leeet al 1996) while others probe the extent towhich organizations are using different gener-ative tools and techniques (cf Cebon andNewton 1999 Chiesa et al 1996 Loch et al1996 Rochford 1991 Szakonyi 1994Thompson 2003)
If knowledge is fundamental to innovationthen it should be possible to measure theaccumulated knowledge of the firm itsknowledge repository One aspect of innova-tion relates to combinations of new andexisting knowledge which privileges the con-tribution of internal and external knowledgeand the mechanisms by which it flows intoand within an organization (Galunic andRodan 1998 Nonaka and Takeuchi 1995 Pittand Clarke 1999) Central to this perspectiveis the idea of lsquoabsorptive capacityrsquo the firmrsquosability to absorb and put to use new knowledgeand involving lsquoan ability to recognize thevalue of new external knowledge assimilateit and apply it to commercial endsrsquo (Cohenand Levinthal 1990 128) Absorptive capacityresults from a prolonged process of invest-ment and knowledge accumulation within thefirm and its development is path dependentFirms with strong absorptive capabilities aremore likely to acquire knowledge and learneffectively from outside Higher levels ofabsorptive capacity appear to be positivelyrelated to innovation and performance (Chen2004 Tsai 2001) but it is impossible topredict what is the lsquorightrsquo level of investmentin absorptive capacity for any individualfirm (Cohen and Levinthal 1990) meaningthat it is not readily amenable to interna-tional benchmarking However the conceptualdevelopment and empirical studies infer orimply a range of organizational knowledgestates
Several quantitative approaches have beendeveloped for the measurement of importedtangible knowledge The most frequently usedapproach counts numbers or value of patentsbrought in However this restricts its applica-tion to contexts in which patents are signifi-cant and overlooks those industries wherethey do not feature For a while patent datawas widely accepted as a proxy measure forinnovation More recently however the valid-ity of patent statistics has been questionedpatents vary in their utility for organizationsand so their input value to the innovation can-not adequately be judged in terms of a cashprice (Griliches 1990 Pakes and Griliches1980) Only a few studies have attempted todevise measures for other contexts For exam-ple Kleinknecht (1987) constructed a ques-tion designed to capture the informal hours ofRampD work that are hypothesized to be hiddenwithin other activities or to take place outsideformal working hours
Patents represent codified knowledge butthe importance of tacit knowledge to organi-zational innovation is underscored in theresource-based approach (Barney 1991 Galu-nic and Rodan 1998 Grant 1991 Leonardand Sensiper 1998) Tacit knowledge is animportant resource when it is has value for theorganization is difficult for competitors toimitate is rare and can be operationalized bythe organization Of particular importance isits acquisition and use (Bess 1998) It can beacquired opportunistically or by a deliberatepolicy of search
Tacit knowledge is notoriously difficult tomeasure in organizational research andmethodologies for its investigation andmeasurement can be complex Ambrosiniand Bowman (2001) for example proposean approach that consists of causal mappingfacilitated by story-telling and the use of meta-phor Other attempts to capture tacit know-ledge and group memory have been reportedby Oliver et al (1999) At the level of theorganization Sveiby (1997) suggests thedifference between market value and netbook value as an indicator of the value to an
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Innovation management measurement A review
organization of intangible knowledge assetsThe first method is resource intensive whilein the second it is not clear how much of theidentified value can be attributed to inputs intoinnovation Tacit knowledge input appears notto be well captured by extant measures
Information flows into and within the firmare important in sparking ideas and in allow-ing the development of innovative conceptsThree measurement approaches to informa-tion flows can be identified first measures ofthe linkages that the innovating group main-tains with external organizations and sourcessecond measures of internal informationgathering processes Third measures of cus-tomer information contacts
Linkage measures determine whether or notthe organization has and maintains externallinkages with other organizations or sourcesof information eg through participation inresearch projects university links or attend-ance at trade shows (Atuahene-Gima 1995Tipping and Zeffren 1995) These are princi-pally dichotomous measures only infre-quently is there a measure that implies somesort of qualitative assessment of the nature ofthe linkages Cebon and Newtonrsquos (1999)measures suggest that quality and diversity oflinkage might be an important factor forexample visits to exemplary projects
Statistics on the use of formal methods ofinformation gathering such as project reviewsand the use of technical reports (Oliver et al1999) provide a frequently used approach tothe measurement of information gatheringCebon and Newton (1999) suggest bench-marking information gathering against com-petitorsrsquo activities to gauge how well theactivity is performed Another important areaabout which a firm needs understanding andinformation is customers Atuahene-Gima(1995) lists a series of measures specificallyaimed at examining the extent to which organ-izations make use of customers as a source ofinformation and include measures assessingthe adequacy of information and customercontact time (Lee et al 1996 Miller andFriesen 1982)
Innovation Strategy
Ramanujam and Mensch (1985) defineinnovation strategy as a timed sequence ofinternally consistent and conditional resourceallocation decisions that are designed to fulfilan organizationrsquos objectives Activities mustbe consistent with an overarching organiza-tional strategy that implies that managementmust take conscious decisions regardinginnovation goals (Sundbo 1997) Innovationstrategy is generally understood to describe anorganizationrsquos innovation posture with regardto its competitive environment in terms of itsnew product and market development plans(Dyer and Song 1998) This techno-centricview predominates in the literature andoverlooks those innovative initiatives that areinternally focused (for example the adoptionof new management techniques and prac-tices) In the conceptualization of innovationstrategy as an articulation of the organizationrsquoscommitment to the development of productsthat are new to itself andor to its marketsand because strategy does not operate in avacuum but requires a structural context twocomplementary approaches to its measure-ment which have been described as objectiveand subjective (Li and Atuahene-Gima 2001)can be identified
In the literature scholars principally haveadapted measures from strategic managementresearch to explore the existence nature andextent of innovation strategy Richard et al(2003) use three scale items drawn from thestrategic posture scale devised by Covin andSlevin (1989) who in turn draw on Milesand Snowrsquos (1978) lsquoprospectorsrsquo and Mintz-bergrsquos (1978) lsquoentrepreneurialrsquo organizationsfor their assessment of bank innovativenessThese studies classify organizations based ontheir approach to innovation using classifica-tions that are ontologically grounded in theassumption that innovation orientation can bedeciphered from quantitative interpretationsof new product and market activity
Other objective evidence of an organizationrsquosinnovation strategic posture may include many
copy Blackwell Publishing Ltd 2006 31
March 2006
of the input measures (such as level of RampDexpenditure) that we have already discussedIt is argued that it is not their absolute magni-tude but their magnitude relative to industryrivals that is significant As has been notedalthough these may be useful indicators ofcommitment or intent they could mask pro-cess inefficiencies However OrsquoBrienrsquos (2003)observation that an interaction betweenintended strategy and slack will influence per-formance suggests that process inefficienciesare less likely to occur where an innovationstrategy is not merely nominally adopted butis embedded in the culture behaviours andactions of the organization
In Li and Atuahene-Gimarsquos (2001) termsthe evidence for an embedded innovationstrategy is subjective and may include evalua-tions of an organizationrsquos emphasis on NPDsuch as resource allocation Saleh and Wang(1993) describe this as consisting of threemain components risk-taking proactivenessand persistent commitment to innovationThese include top management responsibilityfor innovation within the organization includ-ing specifying and communicating a directionfor innovation Cooper (1984) demonstratedthat new product performance is largelydecided by the strategy that top managementadopts The key components are the linkbetween innovation strategy and overall busi-ness goals (strategic orientation) and theprovision of leadership to make innovationhappen via a strong vision (Pinto and Prescott1988) for innovation a long-term commit-ment to innovation and a clear allocation ofresources (Cooper et al 2004) This distinc-tion between strategic planning or orientationand strategic vision or leadership is frequentlyreplicated in the literature
Two distinct types of strategic orientationmeasures can be identified in the literatureFirst those that measure whether the organi-zation has an innovation strategy this can beevaluated in several ways such as commit-ment to differentiated funding (White 2002)explicit expression (does the organizationhave an innovation strategy) (Miller and
Friesen 1982) and identifiable roles for newproducts and services (Cooper and Klein-schmidt 1990 Geisler 1995 Hauser andZettelmeyer 1997 Tipping and Zeffren 1995)The second type of measure regards strategyas a dynamic instrument that shapes andguides innovation in the organization Thesemeasures assume that strategy exists and asksquestions about how effective it is in shapingand guiding lsquoare structures and systemsalignedrsquo (Bessant 2003) lsquodo innovation goalsmatch strategic objectivesrsquo (Tipping andZeffren 1995) and further similar measures ofstrategic fit (Bessant 2003)
From a strategic leadership perspectiveDougherty and Cohen (1995) found thebehaviour of senior managers to be influentialThose chief executives most likely to makeinnovation happen are those with a clearvision of the future operation and direction oforganizational change and creativity (Shin andMcClomb 1998) Senior management areresponsible for developing and communicat-ing a vision for innovation being supportiveand adopting an attitude tolerant to changeand championing the notion of innovationwithin the organization Managerial toleranceto change creates the right climate for theimplementation stage of innovation whereconflict resolution might be necessary(Damanpour 1991)
Managerial attitude is also reflected innorms or support for innovation These are theexpectation approval and practical support ofattempts to introduce new and improved waysof doing things in the work environmentMeasures are mostly qualitative in nature andexplore perceptions mostly about the extentto which respondents recognize factors to bepresent (or absent)
Relatively few measures of championingand leadership have been uncovered in thisreview other than those that simply ask thequestion whether or not one or other existsperhaps through evidence of signs of commit-ment in annual reports (Chiesa et al 1996) orlevels of concern of top management (Coughlanet al 1994) or whether or not an individual
32 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
has been physically assigned to a particularrole (Souitaris 2002) Shane et al (1995) pro-vide a series of reflective questions designedto allow organizations to determine for them-selves their expectations and understandingof the role of champion For example lsquoto whatextent should the organization make it possiblefor the people working on an innovation tobend the rules of the organization to developthe innovation or be allowed to bypass certainpersonnel procedures to get people committedto an innovationrsquo
It must be emphasized that the dominantperspective on strategy in the literature isone that examines the relationship betweenstrategy and performance However a smallnumber of studies have examined the natureof the transitions of these states as organiza-tions adopt and embed an innovation strategyThis sub-section of the literature is under-pinned by the assumption that firms that fol-low innovation strategies differ from otherfirms in several respects It is apparent thatmore innovative firms adopt different opera-tional strategies to accommodate flexibilityand quality capabilities (Alegre-Vidal et al2004) have different capital managementpractices to facilitate slack resources (OrsquoBrien2003) are more tolerant of internal conflict insupport of creativity (Dyer and Song 1998)and maintain organizational structures that arein the lsquointermediate zone between order anddisorderrsquo (Brown and Eisenhardt 1997 22)What is clear from this literature is that anytransition towards an innovation strategy willnecessarily take several years because of theresources and energy that are necessary beforesuch a transformation can even be triggered(Hope Hailey 2001)
Organizational Culture and Structure
Burns and Stalker (1961) described a contin-gency approach to innovation managementlater developed to include concepts of func-tional differentiation specialization and inte-gration (Lawrence and Lorsch 1967) whichsuggests that environmental change prompts a
realignment of the fit between strategy andstructure That is to perform effectively anorganization must be appropriately differenti-ated specialized and integrated Pugh et al(1969) argued that the structure of an organi-zation is strongly related to the context withinwhich it functions Our closing discussion inthe previous section that the characteristics oforganizations following an innovation-focusedstrategy will differ from those that do not isconsistent with this contingency approach andin the following we focus on those dimen-sions of culture and structure that have beenidentified to differentiate between innovativeand non-innovative organizations
Organizational culture and structure concernthe way staff are grouped and the organiza-tional culture within which they work Therehas been considerable work on the situationaland psychological factors supportive of inno-vation in organizations Indeed it has beenwidely demonstrated that the perceived workenvironment (comprising both structural andcultural elements) does make a difference tothe level of innovation in organizations (Ama-bile et al 1996 Ekvall 1996) Creative andinnovative behaviours appear to be promotedby work environment factors (Mathisen andEinarsen 2004) Indeed it is clear that organ-izations can create environments in whichinnovation can be encouraged or hampered(Dougherty and Cohen 1995 Tidd et al1997) A common theme is that of the poly-chronic organization ndash one with the capacityto be in two states at once (Becker andWhisler 1973) Shepard (1967) describes thisas a two-state organization manoeuvreingbetween loose and tight and Mitroff (1987)as business-as-usual versus business-not-as-usual More prosaically this means organiza-tions need to be able for example to providesufficient freedom to allow for the explorationof creative possibilities but sufficient controlto manage innovation in an effective and effi-cient fashion
Ernst (2002) specifies a range of genericcharacteristics for the dedicated project groupassigned the innovation task multidisciplinarity
copy Blackwell Publishing Ltd 2006 33
March 2006
dedicated project leader inter-functional com-munication and co-operation qualificationsand know-how of the project leader teamautonomy and responsibility for the processAnd these factors are echoed throughout theliterature Rothwell (1992) refers to them aslsquocorporate conditionsrsquo Chiesa et al (1996)lsquoenabling processesrsquo and OrsquoReilly and Tushman(1997) lsquonorms for innovation and changersquoHowever despite their perceived importancethere is little guidance on how to measurethem
Volberda (1996) developed a conceptualmodel of alternative flexible organizationalforms that are argued to initiate or respondbetter to different types of competition Yet inspite of its importance there is relatively littleevidence of extant measures of flexibility inthe literature Rothwell (1992) and Ekvall(1996) propose a range of foci for measures oforganizational and production flexibility suchas lsquocorporate flexibility and responsiveness tochangersquo Coughlan (1994) considers the flexi-bility of resource allocation Several measuresof personnel flexibility are evident such aslsquothe adaptiveness of RampD personnel to tech-nology changesrsquo (Lee et al 1996) and lsquothewillingness to try new procedures and toexperiment with change so as to improve asituation or a processrsquo (Abbey and Dickson1983) At the level of the firm Liao et al(2003) introduce a similar construct ndash lsquoorgan-izational responsivenessrsquo
Organizational complexity the amount ofspecialization and task differentiation report-edly have a positive relationship (Damanpour1996) though Wolfe (1994) argues that it mayfavour initiation at the expense of implemen-tation Administrative intensity that is theratio of managers to total employees favoursadministrative innovation (Damanpour 19911996) but possibly at the cost of other pro-duct or technological innovations (Doughertyand Hardy 1996) Centralization the concen-tration of decision-making authority at the topof the organizational hierarchy and formaliza-tion the degree of emphasis on following rulesand procedures in role performance have both
been shown to have a negative impact on organ-izational innovation (Burns and Stalker 1961Damanpour 1991) Indeed rigidity in rulesand procedures may prohibit organizationaldecision-makers from seeking new sources ofinformation (Vyakarnam and Adams 2001)
Underlying the concept of the workplaceenvironment are issues related to the manage-ment of human resources and the creation ofa culture or climate in which individuals per-ceive innovation to be a desired and supportedorganizational objective There has been con-siderable empirical work on organizationalclimates supportive of the innovation processand several measurement instruments havebeen developed which Mathisen and Einarsen(2004) review The Team Climate Inventory(TCI) (Anderson and West 1996 1998) andthe KEYS instrument for assessing the workenvironment for creativity (Amabile et al 1996)have been found to be robust and rigorous
The TCI has been applied and validated inseveral studies (Agrell and Gustafson 1994Anderson and West 1998 Kivimaumlki et al1997 West and Anderson 1996) Replicationstudies using the TCI have found it canexplain a large part of the variance in teamsrsquoinnovative performance (Agrell and Gustafson1994) The TCI is based around four mainfactors participative safety (how participativeis the team in decision-making proceduresand how psychologically secure do teammembers feel about proposing new andimproved ways of doing things) support forinnovation (the degree of practical support forinnovation attempts contrasted with the rheto-ric of professed support by senior manage-ment) vision (how clearly defined sharedattainable and valued are the teamrsquos objectivesand vision) and task orientation (the com-mitment of the team to achieve the highestpossible standards of task performance includ-ing the use of constructive progress monitor-ing procedures) (Anderson and West 1996)Kivimaumlki et al (1997) suggested a fifth factorlsquointeraction frequencyrsquo relating to the regularityof contact and communication within theproject team
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Innovation management measurement A review
There is general agreement about theimportance of individual and group autonomyin the innovation process (Amabile 1998)Zien and Buckler (1997) emphasize the needfor freedom to experiment and the creation ofsafe havens without which innovation out-come might be constrained Measures ofautonomy mix both qualitative and quantita-tive approaches For example lsquothe degree offreedom personnel have in day-to-day operat-ing decisions such as when to work andhow to solve job problems including freedomfrom constant evaluation and close supervi-sionrsquo (Abbey and Dickson 1983) or lsquopercent-age of RampD portfolio with explicit businessunit andor corporate business managementsign-offrsquo (Tipping and Zeffren 1995) Addition-ally several authors have proposed generalmeasures of autonomy such as lsquofreedom tomake operating decisionsrsquo (Abbey and Dick-son 1983) or lsquodegree of empowermentrsquo (deLeede et al 1999 Tipping and Zeffren1995)
Morale and motivation are dimensions ofthe innovative organization that can be meas-ured as they pertain to individuals ndash lsquotheextent to which personnel are well rewardedrsquo(Abbey and Dickson 1983) to groups ndash lsquoourreward system is more group-based thanindividual-basedrsquo (Parthasarthy and Hammond2002) and to the organization as a whole ndashlsquothe degree to which the organization attemptsto excelrsquo (Abbey and Dickson 1983) Aspectsof morale and motivation that have beenmeasured include trust (Miller and Friesen1982) and job satisfaction which has beenmeasured by Keller (1986) on a 20-item scale
Organizational culture may include a sharedvision and it has been argued that the clearerthe vision the more effective it is as a facilitatorof innovation as it enables focused develop-ment of new ideas that can be assessed moreprecisely (West 1990) Pinto and Prescott(1988) found that the only factor to have pre-dictive power in terms of potential for successat all stages of the innovation process (con-ception planning execution and termination)was having a clearly stated missionvision
while West (1990) contends that the quality ofinnovation is partly a function of visionKeller (1986) adopts Kirtonrsquos (1976) 32-itemadopterndashinnovator inventory to determineindividual and team orientation to innovationVision is operationalized in the team climateinventory (cf Agrell and Gustafson 1994Anderson and West 1996 1998 West andAnderson 1996) and is deconstructed into aseries of sub-dimensions such as clarity shared-ness attainability and value with regard toteam objectives
Another aspect of culture is the propensityto take risks Saleh and Wang (1993) describethis as a willingness to confront risky oppor-tunities and tolerate failure and learn fromdoing so rather than recklessly gamblingSimilarly West (1990) demonstrated thathigher levels of participative safety facilitateinnovation Participative safety is non-judgmental supportive and characterized bysocio-emotional cohesiveness The attractive-ness of the organization as a place to workand undertake innovative activities is used byGeisler (1995) as an indicator of the climatefor innovation measured by numbers of can-didates applying for positions and the ageprofile of scientists and engineers Keller(1986) offers a slightly different perspectiveon participative safety with the constructlsquogroup cohesivenessrsquo which he operational-izes using an established five-item measure
This review has described a wide variety ofmeasures proposed for organizational cultureand structure Unlike some other aspects ofinnovation management this area has receivedextensive measurement attention HoweverHolbek (1988) argues that innovating organi-zations must adopt contrasting structures andclimates as they move from the initiation tothe implementation stages of innovationChesborough and Teece (1996) and Burns andStalker (1961) argue that there is a relation-ship between organizational design and typeof innovation It is a significant gap in innova-tion measurement that there appears to be nomeasures that adequately capture or articulatethis sense of structural shift
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March 2006
Portfolio Management
The importance of portfolio management tosuccessful product innovation has recentlyemerged as a key theme in the literature Itis important because of the rapidity at whichresources are consumed in the innovationprocess and the need for these to be managed(Cebon and Newton 1999) The effectivenesswith which an organization manages its RampDportfolio is often a key determinant of itscompetitive advantage (Bard et al 1988) Thefocus of portfolio management is on makingstrategic technological and resource choicesthat govern project selection and the futureshape of the organization (Cooper et al 1999)The problems of allocation of resources evalu-ation selection and termination of projects inachieving the optimal portfolio have beenextensively investigated The models all havethe objective of devising means to allocateresources to projects to obtain the optimalbalance in the product development portfoliothat is arriving at a portfolio that optimizesthe trade-off between returns and risks
The process of selecting innovation projectsrequires evaluation and resource allocationunder uncertain conditions It is argued that asystematic process guided by clear selectioncriteria can help optimize the use of limitedresources and enhance an organizationrsquoscompetitive position (Hall and Nauda 1990)The earliest models used return on investmentas the primary decision criteria (Bard et al 1988)Following this increasingly sophisticatedmathematical tools were developed to resolvewhat Schmidt and Freeland (1992) describe asthe constrained optimization problem that isto maximize the output (according to specifiedcriteria) from a subset of available inputsThese project selection models lsquohave beenvirtually ignored by industryrsquo (Schmidt andFreeland 1992 190) Part of the reason forthis is the inherent complexity of some ofthese models but also that they fail to takeinto account organizational decision andcommunication processes More recentlymodels have tried to take account of these
more qualitative factors involved in decisionprocesses
Scoring models require respondents tospecify the merit of any project proposalaccording to a set of a priori criteria whichmay be objective or subjective (Hall andNauda 1990) Economic and benefit modelsattempt to compute the cost benefit or finan-cial risk of pursuing a specific project whilemathematical programming approaches seekto optimize some objective function(s) subjectto specified resource constraints Algorithmsof varying complexity exist requiring moni-toring and significant data entry and whilemany are conceptually attractive surveys donot show widespread utilization of thesetechniques (Hall and Nauda 1990) Theseapproaches are all based on financial meas-ures such as internal rate of return net presentvalue and return on investment At the otherend of the spectrum qualitative approachessuch as peer review and mental checklistsrely on subjective perceptions and measuresof portfolio balance (Cooper et al 2001Henriksen and Traynor 1999)
Cooper et al (1999) find that best performersuse explicit formalized tools and consist-ently apply them to all projects considered tobelong to a portfolio A series of measures canbe identified that evaluate the whole portfolioof innovation projects to answer questionssuch as lsquois it balanced in terms of quantity ofshort- and long term-projectsrsquo and lsquois there abalance between high and low risk projectsand large and small projectsrsquo (Brenner 1994Cooper et al 2001) Another set seeks to iden-tify the extent to which portfolio evaluationmeasures are formalized within the organiza-tionrsquos processes (Cebon and Newton 1999Chiesa et al 1996 Farrukh et al 2000 Millerand Friesen 1982) Yet another approach is toview project evaluation and selection as anorganizational capability and attempt to deter-mine a level of proficiency (Szakonyi 1994)Finally there is a series of post hoc measuresof the appropriateness of project selections inthe light of results and alignment with busi-ness objectives (Lee et al 1996)
36 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Project Management
Project management is concerned with theprocesses that turn the inputs into a marketa-ble innovation The innovation process iscomplex comprising a myriad of events andactivities some of which can be identified as asequence and some of which occur concur-rently and it is clearly possible that innova-tion processes will differ to some degreeacross organizations and even within organi-zations on a project-by-project basis Havingan efficient process that is able to manage theambiguity of the innovation is universally agreedto be critical to innovation (Globe et al 1973)
Various approaches have been taken tomodelling innovation processes as a series ofevents (Zaltman et al 1973) as a social interac-tion (Voss et al 1999) as a series of transactions(Nelson and Winter 1982) and as a process ofcommunication (Farrukh et al 2000) The his-tory of project management research is partlycharacterized by a debate regarding the extentto which events and activities within the processoccur in linearly sequential discrete identifiablestages (Zaltman et al 1973) or whether eventsare more disorganized (King 1992) or evenchaotic (Koput 1997) However despite thesedifferent viewpoints there are a number ofcommon elements that can be summarized asthe major components of the innovation projectmanagement These are project efficiencytools communications and collaboration
Several studies make efforts to measureproject management efficiency mostly in theform of comparisons between budget and actual(project costs project duration revenue fore-casting) Another measure of project manage-ment success is speed Innovation speed hasbeen positively correlated with product qual-ity or the degree to which it satisfies customerrequirements measures include speed (Hauserand Zettelmeyer 1997) performance againstschedule (Chiesa and Masella 1994) and dura-tion of the process (Cebon and Newton 1999)
To achieve efficiency it is widely recom-mended that organizations seeking to innovateshould establish formal processes for innovat-
ing and make use of tools and techniquesthat may facilitate innovative endeavours Thestage-gate process (Cooper 1990) is possiblythe most familiar of these but other method-ologies for innovation project managementexist including Phased Development Productand Cycle-time Excellence and Total Design(see Jenkins et al (1997) for a discussion)These methodologies have in common theseparation of the product development processinto structured and discrete stages which eachhave milestones in the form of quality controlcheckpoints at which stopgo decisions are madewith regard to the progress of the project Thesehighly structured approaches to the manage-ment of the innovation process began toemerge in the 1990s (Veryzer 1998) The useof structured tools and processes can bemeasured by project process evaluations forexample the use of a formal problem-findingproblem-solving cycle (Bessant 2003) the useof formal post-launch evaluation procedures(Atuahene-Gima 1995) or the use of certifiedprocesses (Chiesa et al 1996) These rathergeneral process measures have been supple-mented by measures of the use of specificinstruments and tools such as interactiveCAD or CAM (Maylor 2001) or the use ofcomputer-integrated manufacturing processes(Parthasarthy and Hammond 2002) but wenote that these measures betray the technologicaland NPD heritage that underpins many of theinnovation measures identified in this reviewEquivalents for service industry public ornot-for-profit sector innovations are somewhatlacking in the literature and constitute aresearch gap
Communications are important in projectmanagement Damanpour (1991) demon-strated the existence of a positive relationshipbetween internal communication and innova-tion Internal communication facilitates thedispersion of ideas within an organizationincreases the diversity and also contributes tothe team lsquoclimatersquo Communication can bemeasured by various integration mechanismseg committees numbers of meetings andcontacts (Damanpour 1991) There are also
copy Blackwell Publishing Ltd 2006 37
March 2006
measures of external communications whichtend to focus on whether communication istaking place the level at which it occurs andwith whom (Cebon and Newton 1999 Leeet al 1996 Rothwell 1992 Souitaris 2002)These measures of internal and external com-munication in the literature are based on bothsubjective evaluations and objective frequencycounts Subjective measures include lsquowe alwaysconsult supplierscustomers on new productideasrsquo (Parthasarthy and Hammond 2002) andlsquodegree of organization members involved andparticipating in extra-organizational professionalactivitiesrsquo (Damanpour 1991) Objective countsinclude (Damanpour 1991) lsquoextent of commu-nication amongst organizational units or groupsmeasured by various integrating mechanismssuch as numbers of committees and frequencyof meetingsrsquo (Anderson and West 1998)lsquofrequency of formal meetings concerningnew ideasrsquo (Souitaris 2002 Szakonyi 1994)lsquohow well do the technical and finance peoplecommunicate with one anotherrsquo
It is widely recognized that collaboratingwith suppliers (Bessant 2003) and customers(von Hippel 1986) can also make a significantcontribution to the innovation processMeasures of collaborative working includethe use of guest engineers (Maylor 2001) thepercentage of projects in co-operation withthird parties (Kerssens-van Drongelen andBilderbeek 1999) and the extent to whichdecision-making at top levels is characterizedby cross-functional discussions (Miller andFriesen 1982) In addition Jassawalla andSashittal (1999) identify some characteristicsof internal collaboration ie that teams arecharacterized by their mindfulness levels ofat-stakeness synergy and transparency butthey do not suggest how these aspects mightbe measured which constitutes a furtherresearch gap
Commercialization
Commercialization can be considered to bethe second of the two phases in Zaltman et alrsquos(1973) conceptualization of the innovation
process that is lsquoimplementationrsquo This canmean taking an innovation to market (Chakra-vorti 2004) but may also include convincingproduction managers to adopt a series of newtechniques available to them (Single andSpurgeon 1996) Indeed the successful intro-duction of new products and services intomarkets is important for the survival andgrowth of organizations Kelm et al (1995)regard commercialization as a transitionalphase in which the organization becomesless reliant on its technological capabilities(important during the activities of initiation)but more dependent on market dynamicsCommercialization is concerned with makingthe innovative process or product a commer-cial success it includes issues such as market-ing sales distribution and joint venturesWhile technical capabilities are important forthe early stages of the innovation process anddevelopment activities for the launch andimplementation stage it is marketing capabili-ties (market investigation market testingpromotion etc) that are significant (Calantoneand di Benedetto 1988 Globe et al 1973)Verhaeghe and Kfir (2002) consider aspectsof commercialization under the headings ofmarket analysis and monitoring reaching thecustomer and market planning
Firm-level measures of the launch or com-mercialization process appear to be relativelythin In their description of the RampD processBalachandra and Brockhoff (1995) character-ize the commercialization stage as requiringlsquobig bucksrsquo market reviews and organiza-tional commitment Most measures appear tobe not much more sophisticated than thisMeasures are frequently restricted to numbersof products launched in a given period (egYoon and Lilien 1985) There is thoughsome focus on market analysis and monitor-ing (Verhaeghe and Kfir 2002) Song andParry (1996) employ a set of measures oflaunch proficiency (salesforce distributionaland promotional support) that directly addressthe lsquoadequacyrsquo of the organizationrsquos facilities inthese areas as do Avlonitis et al (2001) Andthere is a limited mention of the commercial
38 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
intentions of an organizationrsquos competitors(Calantone and di Benedetto 1988) Thethemes of proficiency of personnel in this area(eg Atuahene-Gima 1995 Cebon and New-ton 1999) of adherence to a commercializa-tion schedule (eg Griffin and Page 1993) andof formal post-launch reviews (Atuahene-Gima 1995 von Zedtwitz 2002) can also befound in the literature
Even in the work that addresses post-project reviews very little attention is directedtowards measuring innovation launch orcommercialization However this comes aslittle surprise as Hultink et al (2000) recentlyobserved that little work has been done in thearea perhaps because at least in the innova-tion literature launch activities appear to beconsidered the domain of other specialistsparticularly marketers and the process is seenas separate from innovation In their studythey investigated launch decisions associatedwith success for consumer and business-to-business products Much of the literature thatconsiders launch and commercialization doesso from the viewpoint of the adopter andassesses rates of adoption and diffusion ofinnovations over time across populations(Kessler and Chakrabarti 1996 Van DenBulte 2000)
The area of commercialization appears tobe the least developed of the issues involvedin innovation management This is a huge gapbecause without this last step the previoussteps of assembling inputs project manage-ment etc will not result in a commerciallyviable outcome for the firm We believe thatthis area of innovation is in urgent need offurther development from both theory andmeasurement viewpoints
Discussion
Innovation management measurement is acritical discipline for both academics andpractitioners The capacity of organizations toinnovate is determined by multiple factors thatrelate both to their own internal organizationand to their market environment (Rothwell
et al 1974) and the task of generating andthen converting ideas into usable and market-able products requires high levels of inter-functional co-ordination and integration Thispaper opened with the general observationthat innovation measurement does not appearto take place routinely within managementpractice and that where it does it tends tofocus on output measures Further from therelatively small number of empirical studiesof measurement in practice measurement ofinnovation management appears to be under-taken infrequently in an ad hoc fashion andrelies on dated unbalanced or under-specifiedmodels of the innovation management phe-nomenon This suggests that a large part ofthe contemporary conceptualization of theinnovation management phenomenon is over-looked in practitionersrsquo measurement prac-tices and consequently that opportunities forthe more efficient and effective managementof the innovation process are not realizedSome possible reasons for this state of affairsare failure of academics to communicate ade-quately inconsistency inaccessibility andcomplexity of measures and poor synthesisand packaging
Following a review and synthesis of theliterature we proposed a seven-dimensionalconceptualization of the innovation manage-ment phenomenon and applied it to an exam-ination of the measurement problem Throughthe application of this framework to their ownparticular context it is suggested that practi-tioners will be able to conduct an evaluationof their own innovation management activityidentify gaps weaknesses or deficiencies andalso improvement potential Further it ishoped that organizations applying the frame-work will be able to tease out areas whereinnovation is only nominally adopted in theirprocesses and identify areas where attentionand resources might be focused
From the perspective of its management itis no longer sufficient to treat innovation as alinear process where resources are channelledat one end from which emerges a new prod-uct or process The measurement framework
copy Blackwell Publishing Ltd 2006 39
March 2006
presented in Table 2 shows the breadth andvariety of elements of innovation managementthat ideally need to be measured There havebeen several studies that have investigated thelimitations of various approaches to measure-ment (eg Werner and Souder 1997) and ofspecific measures (eg Trajtenberg 1990) asthey relate to the practice of innovation Thechoice of an appropriate RampD measurementmetric depends on the userrsquos needs in terms ofcomprehensiveness of measurement type ofRampD being measured available data andamount of effort the user can afford to allocateto the exercise Nonetheless the commonciting across various papers of the measuresnoted in the innovation management frame-work presented here suggests that a base setof innovation management measures isimplicitly present in the literature eventhough they may be fragmented in appearanceand presentation By pulling together theinnovation management framework fromdiverse sources this paper aims to bring suchissues into the open and identify relevantresearch gaps Table 2 can be viewed as thebasis for a balanced scorecard (Kaplan andNorton 1992) for innovation managementthat is as a balanced set of areas that need tobe measured in order to gain insight into anorganizationrsquos holistic ability to manage inno-vation Such multidimensional approaches tomeasurement have been found in other areasof management to be an improvement on sim-ple one-dimensional measures and to be ableto capture both short- and long-term aspectsof value creation in the firm (Phelps 2004)
We have identified a large number of meas-ures and approaches in a variety of innovationmanagement areas and we have constructed ageneric set of innovation management meas-urement areas to act as a framework for bal-anced measurement However in several ofthese areas measurement gaps have beenidentified These gaps are of two types valid-ity gaps and omission gaps Validity gaps arisewhere there is insufficient evidence that pro-posed measures actually do capture drivers oroutputs of innovation management for example
we have noted the objections to counts ofpatents or increasing expenditure on RampD beingused as measures of innovative organizationsSimilarly there is an absence of evidence thatthe large number of subjective perceptions ofinnovation management practices proposed(lsquowe do Arsquo lsquowe are good at Brsquo) actually relateto innovation management performance
Omission gaps occur where the importanceof an aspect of innovation management is sup-ported in the literature but measures for thisaspect are lacking Omission gaps are particu-larly prevalent in the elements of innovationmanagement such as knowledge managementinnovation strategy and commercializationthat do not feature strongly in the literature ontechnological and manufacturing-based inno-vation Another area traditionally not givenmuch emphasis in this literature is organiza-tion and culture which fortunately is bettertreated by the organizational behaviour litera-ture where a number of measures have beendeveloped Much of the current state of meas-urement practice can be traced back to the dis-ciplinersquos early manufacturing RampD and NPDfocus While product innovation is undoubt-edly important it is only one dimension of anorganizationrsquos innovation agenda Process andorganizational innovations are recognizedtoo as critical for competitiveness yet theseperspectives are inadequately represented inmeasurement terms
General areas of omission in this fieldrelate to an over-reliance on financial meas-ures rather than process measures for exam-ple the use of financial measures of portfoliooptimization but an absence of portfoliocapability measures a similar reliance oncodified knowledge such as patents to theexclusion of more intangible measures suchas tacit knowledge the measurement of levelsof resources or activities with no indication ofwhat an optimal level would be the measure-ment of drivers of innovation without meas-ures of whether these drivers are aligned witheach other and with firm strategy measures ofpresence that do not measure quality (eg theuse of dichotomous (yesno) measures that do
40 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
not indicate how well an action is implementedand measures of the presence of leadership(such as champions) but not of quality ofleadership) a general absence of measuresfor important properties of organizationalstructures such as flexibility and a lack ofmeasures of the match between structure andenvironment a technological and NPD bias toproject management measures and a relativeabsence of measures for service sectors apaucity of measures for internal communica-tions and a general lack of measures forcommercialization management ndash in particulararound marketing and sales capabilities forinnovative products and services All thesegaps provide the potential for further researchin innovation management measurement
The absence of an accepted framework ofinnovation management measures leads notonly to the gaps identified above but also toother problems in the literature One is that itis frequently unclear whether or not the met-rics used are of the researchersrsquo own devisingdrawn from the literature or are what are usedby the organizations being studied Nor is italways clear when metrics are devised orrecommended whether they are intended foruse in a research capacity or for managementtasks Further the measures proposed in theliterature often seem to be proposed abstractlywith little consideration given to the use ofmeasures as a management tool in the day-to-day context of managing innovation In theabsence of a comprehensive framework forinnovation management measurement organ-izations will inevitably resort to ad hoc andpartial metrics which can encourage wastefulpractice (eg measuring innovation managementcapability according to annual RampD spend)We hope that the framework constructed inthis paper will be useful in the constructionof comprehensive measures of innovationmanagement
Acknowledgements
The research reported here was supported bya grant from Cranfield School of Management
the authors gratefully acknowledge this supportFurther the authors are grateful to the editorsand two anonymous reviewers for their helpfuland insightful comments on previous versionsof this paper
Note
1 Corresponding author Telephone +44 (0) 207594 9137 e-mail radamsimperialacuk
References
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Agrell A and Gustafson R (1994) The teamclimate inventory (TCI) and group innovation apsychometric test on a Swedish sample of workgroups Journal of Occupational and Organiza-tional Psychology 67 143ndash151
Alegre-Vidal J Lapiedra-Alcami R and Chiva-Gomez R (2004) Linking operations strategy andproduct innovation an empirical study of Spanishceramic tile producers Research Policy 33 829ndash839
Amabile TM (1998) How to kill creativity HarvardBusiness Review SeptemberndashOctober 77ndash87
Amabile TM Conti R Coon H Lazenby J andHerron M (1996) Assessing the work environ-ment for creativity Academy of Management Jour-nal 39 1154ndash1184
Ambrosini V and Bowman C (2001) Tacit know-ledge some suggestions for operationalisationJournal of Management Studies 38 811ndash829
Anderson N and West MA (1996) The teamclimate inventory development of the TCI and itsapplications in teambuilding for innovativenessEuropean Journal of Work and Organizational Psy-chology 5 53ndash66
Anderson NR and West MA (1998) Measuringclimate for work group innovation developmentand validation of the team climate inventory Jour-nal of Organizational Behavior 19 235ndash258
Atuahene-Gima K (1995) An exploratory analysisof the input of market orientation on new productperformance a contingency approach Journal ofProduct Innovation Management 12 275ndash293
Avlonitis GJ Papastathopoulou PG and Gounaris SP(2001) An empirically-based typology of productinnovativeness for new financial services success
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March 2006
and failure scenarios Journal of Product Innova-tion Management 18 324ndash342
Balachandra R and Brockhoff K (1995) Are RampDproject termination factors universal Research-Technology Management 38 31ndash36
Balachandra R and Friar J (1997) Factors for suc-cess in RampD projects and new product innovationa contextual framework IEEE Transactions onEngineering Management 44 276ndash287
Baldridge JV and Burnham RA (1975) Organiza-tional innovation ndash individual organizational andenvironmental impacts Administrative ScienceQuarterly 20 165ndash176
Bantel KA and Jackson SE (1989) Top manage-ment and innovations in banking does the compo-sition of the top team make a difference StrategicManagement Journal 10 107ndash124
Barclay I (1992) The new product developmentprocess part 2 Improving the process of new prod-uct development RampD Management 4 307ndash317
Bard JF Balachandra R and Kaufmann PE(1988) An interactive approach to RampD projectselection and termination IEEE Transactions onEngineering Management 35 139ndash146
Barney J (1991) Firm resources and sustained com-petitive advantage Journal of Management 1799ndash120
Becker SW and Whisler TL (1973) The innova-tive organization a selective view of current theoryand research In Wills G Hayhurst R and Midg-ley D (eds) Creating and Marketing New Prod-ucts London Crosby Lockwood Staples
Bess G (1998) A first stage organization life cyclestudy of six emerging nonprofit organizations inLos Angeles Administration in Social Work 2235ndash52
Bessant J (2003) High Involvement InnovationBuilding and Sustaining Competitive AdvantageThrough Continuous Change Chichester JohnWiley
Bessant J and Francis D (1997) Implementing thenew product development process Technovation17 189ndash197
Blackler F (1995) Knowledge knowledge work andorganizations an overview and interpretationOrganization Studies 16 1021ndash1046
Bougrain F and Haudeville B (2002) Innovationcollaboration and SMEs internal research capaci-ties Research Policy 31 735ndash747
Brenner MS (1994) Practical RampD project prioriti-zation Research Technology Management 37 38ndash43
Brown MG and Svenson RA (1988) MeasuringRampD productivity Research-Technology Manage-ment JulyndashAugust 11ndash15
Brown SL and Eisenhardt KM (1997) The art ofcontinuous change linking complexity theory andtime-paced evolution in relentlessly shifting organiza-tions Administrative Science Quarterly 42 1ndash34
Burgelman RA Christensen CM and Wheel-wright SC (2004) Strategic Management of Tech-nology and Innovation 4th edition New YorkMcGraw HillIrwin
Burns TR and Stalker GM (1961) The Manage-ment of Innovation London Tavistock
Calantone RJ and di Benedetto CA (1988) Anintegrative model of the new product developmentprocess an empirical validation Journal of Prod-uct Innovation Management 5 201ndash215
Cebon P and Newton P (1999) Innovation in firmstowards a framework for indicator developmentMelbourne Business School Working Paper 99-9
Chakravorti B (2004) The new rules for bringinginnovations to market Harvard Business Review82 58ndash67
Chen C-J (2004) The effects of knowledgeattribute alliance characteristics and absorptivecapacity on knowledge transfer performance RampDManagement 34 311ndash321
Chesborough HW and Teece DJ (1996) When isvirtual virtuous Organizing for innovation Har-vard Business Review JanuaryndashFebruary 65ndash73
Chiesa V and Masella C (1994) Searching for aneffective measure of RampD performance In Pro-ceedings 2nd International Product DevelopmentManagement Conference Gothenburg Sweden30ndash31 May Brussels European Institute forAdvanced Studies in Management
Chiesa V Coughlan P and Voss A (1996) Devel-opment of a technical innovation audit Journal ofProduct Innovation Management 13 105ndash136
Cohen WM and Levinthal DA (1990) Absorptivecapacity a new perspective on learning and inno-vation Administrative Science Quarterly 35 128ndash152
Cooper RG (1979a) The dimensions of industrialnew product success and failure Journal of Mar-keting 43 93ndash103
Cooper RG (1979b) Identifying industrial newproduct success Project NewProd Industrial Mar-keting Management 8 124ndash135
Cooper RG (1984) The strategyndashperformance linkin product innovation RampD Management 14 247ndash259
42 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Cooper RG (1990) Stage-gate systems a new toolfor managing new products Business Horizons 3344ndash56
Cooper RG and Kleinschmidt EJ (1990) Newproduct success factors a comparison of lsquokillsrsquoversus successes and failures RampD Management20 47ndash64
Cooper RG and Kleinschmidt EJ (1995) Bench-marking the firmrsquos critical success factors in newproduct development Journal of Product Innova-tion Management 12 374ndash391
Cooper RG Edgett SJ and Kleinschmidt EJ(1999) New product portfolio management prac-tices and performance Journal of Product Innova-tion Management 16 333ndash351
Cooper RG Edgett SJ and Kleinschmidt EJ(2001) Portfolio Management for New Products2nd edition Cambridge MA Perseus
Cooper RG Edgett SJ and Kleinschmidt EJ (2004)Benchmarking best NPD practices Research-Technology Management 47 50ndash59
Cordero R (1990) The measurement of innovationperformance in the firm an overview ResearchPolicy 19 185ndash192
Cormican K and OrsquoSullivan D (2004) Auditingbest practice for effective product innovationmanagement Technovation 24 819ndash829
Coughlan P Chiesa V and Voss C (1994) Evalu-ating leadership as an enabler of innovation InProceedings 2nd International Product Develop-ment Management Conference GothenburgSweden 30ndash31 May Brussels European Institutefor Advanced Studies in Management
Covin JG and Slevin DP (1989) Strategic manage-ment of small firms in hostile and benign environ-ments Strategic Management Journal 10 75ndash87
Daft R (1978) A dual-core model of organizationalinnovation Academy of Management Journal 21193ndash210
Damanpour F (1991) Organizational innovation ameta-analysis of effects of determinants and mod-erators Academy of Management Journal 34 555ndash590
Damanpour F (1996) Organizational complexity andinnovation developing and testing multiple contin-gency models Management Science 42 693ndash716
Davis MC (1998) Knowledge management Infor-mation Strategy The Executiversquos Journal 15 11ndash22
De Brentani U (1991) Success factors in developingnew business services European Journal of Mar-keting 25 33ndash60
De Leede J Nijhof AH and Fisscher OA (1999)The myth of self managing teams a reflection onthe allocation of responsibilities between individu-als teams and the organisation Journal of BusinessEthics 21 203ndash215
Deeds DL (2001) The role of RampD intensitytechnical development and absorptive capacity increating entrepreneurial wealth in high technologystart-ups Journal of Engineering and TechnologyManagement 18 29ndash47
Denyer D and Neely A (2004) Introduction to spe-cial issue innovation and productivity performancein the UK International Journal of ManagementReviews 45 131ndash135
Di Benedetto CA (1996) Identifying the key suc-cess factors in new product launch Journal ofProduct Innovation Management 16 530ndash544
Dodgson M and Hinze S (2000) Indicators used tomeasure the innovation process defects and possi-ble remedies Research Evaluation 8 101ndash114
Dougherty D and Cohen M (1995) Product inno-vation in mature firms In Bowman E and KogutB (eds) Redesigning the Firm New York OxfordUniversity Press
Dougherty D and Hardy C (1996) Sustained prod-uct innovation in large mature organizations over-coming innovation-to-organization problemsAcademy of Management Journal 39 1120ndash1153
DTI (1998) An Audience With Innovation Innovationin Management London Department of Trade andIndustry
Dyer B and Song XM (1998) Innovation strategyand sanctioned conflict a new edge in innovationJournal of Product Innovation Management 15505ndash519
Ekvall G (1996) Organizational climate for creativ-ity and innovation European Journal of Work andOrganizational Psychology 5 105ndash123
Ernst H (2002) Success factors of new productdevelopment a review of the empirical literatureInternational Journal of Management Reviews 41ndash40
Farrukh C Phaal R Probert D Gregory M andWright J (2000) Developing a process for therelative valuation of RampD programmes RampDManagement 30 43ndash53
Frenkel A Maital S and Grupp H (2000) Meas-uring dynamic technical change a technometricapproach International Journal of TechnologyManagement 20 429ndash441
Galunic DC and Rodan S (1998) Resource recom-binations and the firm knowledge structures and
copy Blackwell Publishing Ltd 2006 43
March 2006
the potential for Schumpeterian innovationStrategic Management Journal 19 1193ndash1201
Geisler E (1995) An integrated costndashperformancemodel of research-and-development evaluationOmega ndash International Journal of ManagementScience 23 281ndash294
Glaser BG and Strauss AL (1967) The Discoveryof Grounded Theory Strategies for QualitativeResearch London Aldine
Globe S Levy GW and Schwartz CM (1973)Key factors and events in the innovation processResearch Management 16 8ndash15
Goffin K and Pfeiffer R (1999) Innovation Man-agement in UK and German Manufacturing Com-panies London Anglo-German Foundation for theStudy of Industrial Society
Grant RM (1991) The resource-based theory ofcompetitive advantage implications for strategyformulation California Management Review 33114ndash135
Greve HR (2003) A behavioral theory of RampDexpenditures and innovations evidence fromshipbuilding Academy of Management Journal 46685ndash702
Griffin A (1997) PDMA research on new productdevelopment practices updating trends and bench-marking best practices Journal of Product Innova-tion Management 14 429ndash458
Griffin A and Page AL (1993) An interim reporton measuring product development success andfailure Journal of Product Innovation Manage-ment 10 291ndash308
Griliches Z (1990) Patent statistics as economicindicators a survey Journal of Economic Litera-ture 28 1661ndash1707
Hall DL and Nauda A (1990) An interactiveapproach for selecting IRampD projects IEEE Trans-actions on Engineering Management 37 126ndash133
Hauser JR and Zettelmeyer F (1997) Metrics toevaluate RDampE Research-Technology Manage-ment 40 32ndash38
Henriksen AD and Traynor AJ (1999) A practicalRampD project-selection scoring tool IEEE Trans-actions on Engineering Management 46 158ndash170
Hipp C and Grupp H (2005) Innovation in theservice sector the demand for service specific-innovation measurement concepts and typologiesResearch Policy 34 517ndash535
Holbek J (1988) The innovation design dilemmasome notes on its relevance and solutions InGroslashnhaug K and Kaufmann G (eds) Innovation
A Cross-Disciplinary Perspective NorwegianUniversity Press pp 253ndash277
Hope Hailey V (2001) Breaking the mould Innova-tion as a strategy for corporate renewal Inter-national Journal of Human Resource Management12 1126ndash1140
Hull R Coombs R and Peltu M (2000) Know-ledge management practices for innovation anaudit tool for improvement International Journalof Technology Management 20 633ndash656
Hultink EJ Hart S Robben HSJ and Griffin A(2000) Launch decisions and new product successan empirical comparison of consumer and indus-trial products Journal of Product Innovation Man-agement 17 5ndash23
Jassawalla AR and Sashittal HC (1999) Buildingcollaborative cross-functional new product teamsAcademy of Management Executive 13 50ndash63
Jenkins S Forbes S Durrani TS and BanerjeeSK (1997) Managing the product developmentprocess 1 An assessment International Journal ofTechnology Management 13 359ndash378
Kaplan RS and Norton DP (1992) The balancedscorecard ndash measures that drive performance HarvardBusiness Review JanuaryndashFebruary 71ndash79
Keller RT (1986) Predictors of performance ofproject groups in RampD organizations Academy ofManagement Journal 29 715ndash726
Kelm KM Narayanan VK and Pinches GE (1995)Shareholder value creation during research-and-development innovation and commercialization stagesAcademy of Management Journal 38 770ndash786
Kerssens-van Drongelen IC and Bilderbeek J(1999) RampD performance measurement morethan choosing a set of metrics RampD Management29 35ndash46
Kerssens-van Drongelen IC and de Weerd-Nederhof PC (1999) The use of performancemeasurement tools for balancing short- and long-term NPD performance International Journal ofInnovation Management 3 397ndash426
Kessler EH and Chakrabarti AK (1996) Innova-tion speed a conceptual model of context anteced-ents and outcomes Academy of ManagementReview 21 1143ndash1191
Kim B and Oh H (2002) An effective RampD per-formance measurement system survey of KoreanRampD researchers Omega ndash International Journalof Management Science 30 19ndash31
Kim J and Wilemon D (2002) Strategic issues inmanaging innovationrsquos fuzzy front-end EuropeanJournal of Innovation Management 5 27ndash39
44 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Kimberly JR (1981) Managerial innovation InNystrom PC and Starbuck WH (eds) Handbookof Organizational Design Vol 1 New YorkOxford University Press pp 84ndash104
King N (1992) Modelling the innovation process anempirical comparison of approaches Journal ofOccupational and Organizational Psychology 6589ndash100
Kirton MJ (1976) Adaptors and innovators adescription and measure Journal of Applied Psy-chology 61 622ndash629
Kivimaumlki M Kuk G Elovainio M Thomson LKalliomaumlki-Levanto T and Heikkilauml A (1997)The team climate inventory (TCI) ndash four or fivefactors Testing the structure of TCI in samples oflow and high complexity jobs Journal of Occupa-tional and Organizational Psychology 70 375ndash389
Kivimaumlki M Lansisalmi H Elovainio M Heik-kila A Lindstrom K Harisalo R Sipila K andPuolimatka L (2000) Communication as a deter-minant of organizational innovation RampD Man-agement 30 33ndash42
Kleinknecht A (1987) Measuring RampD in smallfirms how much are we missing Journal of Indus-trial Economics 36 253ndash256
Koen P Ajamian G Burkart R Clamen ADavidson J DrsquoAmore R Elkins C Herald KIncorvia M Johnson A Karol R Seibert RSlavejkov A and Wagner K (2001) Providingclarity and a common language to the lsquofuzzy front endrsquoResearch-Technology Management 44 46ndash55
Koput K (1997) A chaotic model of innovativesearch some answers many questions Organiza-tion Science 8 528ndash542
Lawrence PR and Lorsch JW (1967) Organizationand Environment Harvard MA Harvard Univer-sity Press
Lee M Son B and Lee H (1996) Measuring RampDeffectiveness in Korean companies Research-Technology Management 39 28ndash31
Leonard D and Sensiper S (1998) The role of tacitknowledge in group innovation California Man-agement Review 40 112ndash132
Leseure M Birdi K Bauer J Denyer D andNeely A (2004) Adoption of Promising PracticeA Systematic Review of the Literature LondonAdvanced Institute of Management Research
Li HY and Atuahene-Gima K (2001) Productinnovation strategy and the performance of newtechnology ventures in China Academy of Man-agement Journal 44 1123ndash1134
Liao J Welsch H and Stoica M (2003) Organiza-tional absorptive capacity and responsivenessan empirical investigation of growth-orientedSMEs Entrepreneurship Theory and Practice 2863ndash86
Linstone HA and Turoff M (eds) (2002) The Del-phi Method Techniques and Applications httpwwwisnjitedupubsdelphibook
Loch C Stein L and Terwiesch C (1996) Meas-uring development performance in the electronicsindustry Journal of Product Innovation Manage-ment 13 3ndash20
Mathisen GE and Einarsen S (2004) A review ofinstruments assessing creative and innovative envi-ronments within organizations Creativity ResearchJournal 16 119ndash140
Maylor H (2001) Assessing the relationshipbetween practice changes and process improve-ment in new product development Omega ndashInternational Journal of Management Science 2985ndash96
McAdam RMS (1999) The process of knowledgemanagement within organizations a critical assess-ment of both theory and practice Knowledge andProcess Management 6 101ndash113
McManus RJ Wilson S Delaney BC Fitzmau-rice DA Hyde CJ Tobias RS Jowett S andHobbs FDR (1998) Review of the usefulness ofcontacting other experts when conducting a litera-ture search for systematic reviews British MedicalJournal 317 1562ndash1563
Miles RE and Snow CC (1978) Organization StrategyStructure and Process New York McGraw-Hill
Miller D and Friesen PH (1982) Innovation inconservative and entrepreneurial firms two modelsof strategic momentum Strategic ManagementJournal 3 1ndash24
Mintzberg H (1978) Patterns in strategy formationManagement Science 24 934ndash948
Mitroff I (1987) Business Not As Usual Rethinkingour Individual Corporate and Industrial Strategiesfor Global Competition London Jossey-Bass
Moenaert RK De Meyer A Souder WE andDeschoolmeester D (1995) RampDMarketing com-munication during the fuzzy front-end IEEETransactions on Engineering Management 42243ndash257
Neely A and Hii J (1998) Innovation and BusinessPerformance A Literature Review Report producedfor Government Office for the Eastern RegionCambridge The Judge Institute of ManagementStudies University of Cambridge
copy Blackwell Publishing Ltd 2006 45
March 2006
Nelson R and Winter G (1982) An EvolutionaryTheory of Economic Change Cambridge MABelknap Press
Nohria N and Gulati R (1996) Is slack good or badfor innovation Academy of Management Journal39 1245ndash1264
Nonaka I (1991) The knowledge-creating companyHarvard Business Review NovemberndashDecember96ndash104
Nonaka I and Takeuchi H (1995) The KnowledgeCreating Company How Japanese CompaniesCreate the Dynamics of Innovation New YorkOxford University Press
OrsquoBrien JP (2003) The capital structure implica-tions of pursuing a strategy of innovation StrategicManagement Journal 24 415ndash431
OrsquoReilly CA and Tushman ML (1997) Using cul-ture for strategic advantage promoting innovationthrough social control In Tushman ML andAnderson P (eds) Managing Strategic Innovationand Change A Collection of Readings New YorkOxford University Press pp 200ndash216
Oliver N Dewberry E and Dostaler I (1999) Newproduct development performance and practice aninternational benchmarking study in the consumerelectronics industry In Proceedings 6th Inter-national Product Development Management Confer-ence Cambridge UK Brussels European Institutefor Advanced Studies in Management
Pakes A and Griliches Z (1980) Patents and RampDat the firm level a first report Economic Letters 5377ndash381
Parthasarthy R and Hammond J (2002) Productinnovation input and outcome moderating effectsof the innovation process Journal of Engineeringand Technology Management 19 75ndash91
Patterson F (2003) Innovation potential indicatorAvailable at wwwoppcouk
Phelps B (2004) Smart Business Metrics MeasureWhat Really Counts and Manage What Makes theDifference London FT-Prentice Hall
Pinto JK and Prescott JE (1988) Changes in crit-ical success factors over the stages in the projectlife cycle Journal of Management 14 5ndash18
Pitt M and Clarke K (1999) Competing on compe-tence a knowledge perspective on the managementof strategic innovation Technology Analysis andStrategic Management 11 301ndash316
Pittaway L Robertson M Munir K Denyer D andNeely A (2004) Networking and Innovation in theUK a Systematic Review of the Literature LondonAdvanced Institute of Management Research
Porter ME and Ketels CHM (2003) UK Compet-itiveness Moving to the Next Stage DTI Econom-ics Paper No 3 URN 03899
Pugh DS Hickson DJ Hinings CR and TurnerC (1969) The context of organization structuresAdministrative Science Quarterly 14 91ndash114
Ramanujam V and Mensch GO (1985) Improvingthe strategyndashinnovation link Journal of ProductInnovation Management 2 213ndash223
Richard O McMillan A Chadwick K and DwyerS (2003) Employing an innovation strategy inracially diverse workforces ndash effects on firm per-formance Group amp Organization Management 28107ndash126
Rickards T (1991) Innovation and creativity treesand pathways RampD Management 21 97ndash108
Rochford L (1991) Generating and screening newproduct ideas Industrial Marketing Management20 287ndash296
Rothwell R (1992) Successful industrial innovationcritical factors for the 1990s RampD Management22 221ndash239
Rothwell R Freeman C Horseley A JervisVTP Robertson AB and Townsend J (1974)SAPPHO updated ndash Project SAPPHO phase IIResearch Policy 3 258ndash291
Saleh SD and Wang CK (1993) The managementof innovation ndash strategy structure and organiza-tional climate IEEE Transactions on EngineeringManagement 40 14ndash21
Schmidt RL and Freeland JR (1992) Recentprogress in modelling RampD project-selection proc-esses IEEE Transactions on Engineering Manage-ment 39 189ndash201
Schroeder RG Van de Ven AH Scudder GDand Polley D (1989) The development of innova-tion ideas In Van de Ven AH Angle HL andPoole M (eds) Research on the Management ofInnovation The Minnesota Studies New YorkHarper amp Row pp 107ndash133
Scott S and Bruce R (1994) Determinants ofinnovative behaviour a path model of individualinnovation Academy of Management Journal 37580ndash607
Shane S Venkataraman S and MacMillan I (1995)Cultural differences in innovation championingstrategies Journal of Management 21 931ndash952
Shepard HA (1967) Innovation-resisting and inno-vation producing organizations Journal of Busi-ness 40 470ndash477
Shin J and McClomb GE (1998) Top executiveleadership and organizational innovation an
46 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
empirical investigation of nonprofit human serviceorganizations (HSOS) Administration in SocialWork 22 1ndash21
Single AW and Spurgeon WM (1996) Creatingand commercializing innovation inside a skunkworks Research-Technology Management 39 38ndash41
Song XM and Parry ME (1996) What separatesJapanese new product winners from losersJournal of Product Innovation Management 13422ndash439
Souitaris V (2002) Firm-specific competenciesdetermining technological innovation a survey inGreece RampD Management 32 61ndash77
Stock GN Greis NP and Fischer WA (2001)Absorptive capacity and new product developmentJournal of High Technology ManagementResearch 12 77ndash91
Sundbo J (1997) Management of innovation inservices Service Industries Journal 17 432ndash455
Sveiby KE (1997) The New Organizational WealthManaging and Measuring Knowledge-BasedAssets San Francisco CA Berrett-Koehler
Szakonyi R (1994) Measuring RampD effectiveness IResearch-Technology Management 37 27ndash32
Thompson L (2003) Improving the creativity oforganizational work groups Academy of Manage-ment Executive 17 96ndash109
Tidd J Bessant J and Pavitt K (1997) ManagingInnovation Integrating Technological Market andOrganizational Change Chichester UK JohnWiley
Tipping J and Zeffren E (1995) Assessing thevalue of your technology ResearchndashTechnologyManagement 38 22ndash40
Trajtenberg M (1990) A penny for your quotes ndashpatent citations and the value of innovations RandJournal of Economics 21 172ndash187
Tranfield D Denyer D and Smart P (2003)Towards a methodology for developing evidence-informed management knowledge by means of asystematic review British Journal of Management14 207ndash222
Tsai W (2001) Knowledge transfer in intraorganiza-tional networks effects of network position andabsorptive capacity on business unit innovation andperformance Academy of Management Journal44 996ndash1004
Van Den Bulte C (2000) New product diffusionacceleration measurement and analysis MarketingScience 19 366ndash380
Verhaeghe A and Kfir R (2002) Managing innovationin a knowledge intensive technology organisation(KITO) RampD Management 32 409ndash417
Verworn B (2002) The fuzzy front end of productdevelopment an exploratory study In Proceedings9th International Product Development ManagementConference Sophia Antipolis France pp 863ndash878Brussels European Institute for Advanced Studiesin Management
Veryzer RW (1998) Discontinuous innovation andthe new product development process Journal ofProduct Innovation Management 15 304ndash321
Volberda HW (1996) Towards the flexible formhow to remain vital in hypercompetitive environ-ments Organizational Science 7 359ndash374
Von Hippel E (1986) Lead users a source of novelproduct concepts Management Science 32 791ndash805
Von Zedtwitz M (2002) Organizational learningthrough post-project reviews in RampD RampD Man-agement 32 255ndash268
Voss C Chase R and Roth A (1999) Internationalservice study Decision Line May 4ndash7
Vyakarnam S and Adams RJ (2001) Institutionalbarriers to enterprise support an empirical studyEnvironment and Planning C Government andPolicy 19 335ndash353
Werner BM and Souder WE (1997) MeasuringRampD performance ndash state of the art Research-Technology Management 40 34ndash42
West MA (1990) The social psychology of innova-tion in groups In West MA and Farr JL (eds)Innovation and Creativity at Work Psychologicaland Organizational Strategies Chichester UKJohn Wiley pp 309ndash333
West MA and Anderson NR (1996) Innovation intop management teams Journal of Applied Psychol-ogy 81 680ndash693
White A (2002) Enabling factors in the front end ofthe innovation process In Proceedings 9thInternational Product Development ManagementConference Sophia Antipolis France BrusselsEuropean Institute for Advanced Studies inManagement pp 879ndash887
Wolfe RA (1994) Organizational innovationreview critique and suggested research direc-tions Journal of Management Studies 31 405ndash431
Yoon E and Lilien GL (1985) A new productlaunch-time decision model Journal of ProductInnovation Management 3 134ndash144
Zahra SA and George G (2002) Absorptivecapacity a review reconceptualization and
copy Blackwell Publishing Ltd 2006 47
March 2006
extension Academy of Management Review 27185
Zaltman G Duncan R and Holbek J (1973) Inno-vations and Organizations New York John Wiley
Zien KA and Buckler SA (1997) From experiencedreams to market crafting a culture of innovationJournal of Product Innovation Management 14274ndash287
Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
30 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
organization of intangible knowledge assetsThe first method is resource intensive whilein the second it is not clear how much of theidentified value can be attributed to inputs intoinnovation Tacit knowledge input appears notto be well captured by extant measures
Information flows into and within the firmare important in sparking ideas and in allow-ing the development of innovative conceptsThree measurement approaches to informa-tion flows can be identified first measures ofthe linkages that the innovating group main-tains with external organizations and sourcessecond measures of internal informationgathering processes Third measures of cus-tomer information contacts
Linkage measures determine whether or notthe organization has and maintains externallinkages with other organizations or sourcesof information eg through participation inresearch projects university links or attend-ance at trade shows (Atuahene-Gima 1995Tipping and Zeffren 1995) These are princi-pally dichotomous measures only infre-quently is there a measure that implies somesort of qualitative assessment of the nature ofthe linkages Cebon and Newtonrsquos (1999)measures suggest that quality and diversity oflinkage might be an important factor forexample visits to exemplary projects
Statistics on the use of formal methods ofinformation gathering such as project reviewsand the use of technical reports (Oliver et al1999) provide a frequently used approach tothe measurement of information gatheringCebon and Newton (1999) suggest bench-marking information gathering against com-petitorsrsquo activities to gauge how well theactivity is performed Another important areaabout which a firm needs understanding andinformation is customers Atuahene-Gima(1995) lists a series of measures specificallyaimed at examining the extent to which organ-izations make use of customers as a source ofinformation and include measures assessingthe adequacy of information and customercontact time (Lee et al 1996 Miller andFriesen 1982)
Innovation Strategy
Ramanujam and Mensch (1985) defineinnovation strategy as a timed sequence ofinternally consistent and conditional resourceallocation decisions that are designed to fulfilan organizationrsquos objectives Activities mustbe consistent with an overarching organiza-tional strategy that implies that managementmust take conscious decisions regardinginnovation goals (Sundbo 1997) Innovationstrategy is generally understood to describe anorganizationrsquos innovation posture with regardto its competitive environment in terms of itsnew product and market development plans(Dyer and Song 1998) This techno-centricview predominates in the literature andoverlooks those innovative initiatives that areinternally focused (for example the adoptionof new management techniques and prac-tices) In the conceptualization of innovationstrategy as an articulation of the organizationrsquoscommitment to the development of productsthat are new to itself andor to its marketsand because strategy does not operate in avacuum but requires a structural context twocomplementary approaches to its measure-ment which have been described as objectiveand subjective (Li and Atuahene-Gima 2001)can be identified
In the literature scholars principally haveadapted measures from strategic managementresearch to explore the existence nature andextent of innovation strategy Richard et al(2003) use three scale items drawn from thestrategic posture scale devised by Covin andSlevin (1989) who in turn draw on Milesand Snowrsquos (1978) lsquoprospectorsrsquo and Mintz-bergrsquos (1978) lsquoentrepreneurialrsquo organizationsfor their assessment of bank innovativenessThese studies classify organizations based ontheir approach to innovation using classifica-tions that are ontologically grounded in theassumption that innovation orientation can bedeciphered from quantitative interpretationsof new product and market activity
Other objective evidence of an organizationrsquosinnovation strategic posture may include many
copy Blackwell Publishing Ltd 2006 31
March 2006
of the input measures (such as level of RampDexpenditure) that we have already discussedIt is argued that it is not their absolute magni-tude but their magnitude relative to industryrivals that is significant As has been notedalthough these may be useful indicators ofcommitment or intent they could mask pro-cess inefficiencies However OrsquoBrienrsquos (2003)observation that an interaction betweenintended strategy and slack will influence per-formance suggests that process inefficienciesare less likely to occur where an innovationstrategy is not merely nominally adopted butis embedded in the culture behaviours andactions of the organization
In Li and Atuahene-Gimarsquos (2001) termsthe evidence for an embedded innovationstrategy is subjective and may include evalua-tions of an organizationrsquos emphasis on NPDsuch as resource allocation Saleh and Wang(1993) describe this as consisting of threemain components risk-taking proactivenessand persistent commitment to innovationThese include top management responsibilityfor innovation within the organization includ-ing specifying and communicating a directionfor innovation Cooper (1984) demonstratedthat new product performance is largelydecided by the strategy that top managementadopts The key components are the linkbetween innovation strategy and overall busi-ness goals (strategic orientation) and theprovision of leadership to make innovationhappen via a strong vision (Pinto and Prescott1988) for innovation a long-term commit-ment to innovation and a clear allocation ofresources (Cooper et al 2004) This distinc-tion between strategic planning or orientationand strategic vision or leadership is frequentlyreplicated in the literature
Two distinct types of strategic orientationmeasures can be identified in the literatureFirst those that measure whether the organi-zation has an innovation strategy this can beevaluated in several ways such as commit-ment to differentiated funding (White 2002)explicit expression (does the organizationhave an innovation strategy) (Miller and
Friesen 1982) and identifiable roles for newproducts and services (Cooper and Klein-schmidt 1990 Geisler 1995 Hauser andZettelmeyer 1997 Tipping and Zeffren 1995)The second type of measure regards strategyas a dynamic instrument that shapes andguides innovation in the organization Thesemeasures assume that strategy exists and asksquestions about how effective it is in shapingand guiding lsquoare structures and systemsalignedrsquo (Bessant 2003) lsquodo innovation goalsmatch strategic objectivesrsquo (Tipping andZeffren 1995) and further similar measures ofstrategic fit (Bessant 2003)
From a strategic leadership perspectiveDougherty and Cohen (1995) found thebehaviour of senior managers to be influentialThose chief executives most likely to makeinnovation happen are those with a clearvision of the future operation and direction oforganizational change and creativity (Shin andMcClomb 1998) Senior management areresponsible for developing and communicat-ing a vision for innovation being supportiveand adopting an attitude tolerant to changeand championing the notion of innovationwithin the organization Managerial toleranceto change creates the right climate for theimplementation stage of innovation whereconflict resolution might be necessary(Damanpour 1991)
Managerial attitude is also reflected innorms or support for innovation These are theexpectation approval and practical support ofattempts to introduce new and improved waysof doing things in the work environmentMeasures are mostly qualitative in nature andexplore perceptions mostly about the extentto which respondents recognize factors to bepresent (or absent)
Relatively few measures of championingand leadership have been uncovered in thisreview other than those that simply ask thequestion whether or not one or other existsperhaps through evidence of signs of commit-ment in annual reports (Chiesa et al 1996) orlevels of concern of top management (Coughlanet al 1994) or whether or not an individual
32 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
has been physically assigned to a particularrole (Souitaris 2002) Shane et al (1995) pro-vide a series of reflective questions designedto allow organizations to determine for them-selves their expectations and understandingof the role of champion For example lsquoto whatextent should the organization make it possiblefor the people working on an innovation tobend the rules of the organization to developthe innovation or be allowed to bypass certainpersonnel procedures to get people committedto an innovationrsquo
It must be emphasized that the dominantperspective on strategy in the literature isone that examines the relationship betweenstrategy and performance However a smallnumber of studies have examined the natureof the transitions of these states as organiza-tions adopt and embed an innovation strategyThis sub-section of the literature is under-pinned by the assumption that firms that fol-low innovation strategies differ from otherfirms in several respects It is apparent thatmore innovative firms adopt different opera-tional strategies to accommodate flexibilityand quality capabilities (Alegre-Vidal et al2004) have different capital managementpractices to facilitate slack resources (OrsquoBrien2003) are more tolerant of internal conflict insupport of creativity (Dyer and Song 1998)and maintain organizational structures that arein the lsquointermediate zone between order anddisorderrsquo (Brown and Eisenhardt 1997 22)What is clear from this literature is that anytransition towards an innovation strategy willnecessarily take several years because of theresources and energy that are necessary beforesuch a transformation can even be triggered(Hope Hailey 2001)
Organizational Culture and Structure
Burns and Stalker (1961) described a contin-gency approach to innovation managementlater developed to include concepts of func-tional differentiation specialization and inte-gration (Lawrence and Lorsch 1967) whichsuggests that environmental change prompts a
realignment of the fit between strategy andstructure That is to perform effectively anorganization must be appropriately differenti-ated specialized and integrated Pugh et al(1969) argued that the structure of an organi-zation is strongly related to the context withinwhich it functions Our closing discussion inthe previous section that the characteristics oforganizations following an innovation-focusedstrategy will differ from those that do not isconsistent with this contingency approach andin the following we focus on those dimen-sions of culture and structure that have beenidentified to differentiate between innovativeand non-innovative organizations
Organizational culture and structure concernthe way staff are grouped and the organiza-tional culture within which they work Therehas been considerable work on the situationaland psychological factors supportive of inno-vation in organizations Indeed it has beenwidely demonstrated that the perceived workenvironment (comprising both structural andcultural elements) does make a difference tothe level of innovation in organizations (Ama-bile et al 1996 Ekvall 1996) Creative andinnovative behaviours appear to be promotedby work environment factors (Mathisen andEinarsen 2004) Indeed it is clear that organ-izations can create environments in whichinnovation can be encouraged or hampered(Dougherty and Cohen 1995 Tidd et al1997) A common theme is that of the poly-chronic organization ndash one with the capacityto be in two states at once (Becker andWhisler 1973) Shepard (1967) describes thisas a two-state organization manoeuvreingbetween loose and tight and Mitroff (1987)as business-as-usual versus business-not-as-usual More prosaically this means organiza-tions need to be able for example to providesufficient freedom to allow for the explorationof creative possibilities but sufficient controlto manage innovation in an effective and effi-cient fashion
Ernst (2002) specifies a range of genericcharacteristics for the dedicated project groupassigned the innovation task multidisciplinarity
copy Blackwell Publishing Ltd 2006 33
March 2006
dedicated project leader inter-functional com-munication and co-operation qualificationsand know-how of the project leader teamautonomy and responsibility for the processAnd these factors are echoed throughout theliterature Rothwell (1992) refers to them aslsquocorporate conditionsrsquo Chiesa et al (1996)lsquoenabling processesrsquo and OrsquoReilly and Tushman(1997) lsquonorms for innovation and changersquoHowever despite their perceived importancethere is little guidance on how to measurethem
Volberda (1996) developed a conceptualmodel of alternative flexible organizationalforms that are argued to initiate or respondbetter to different types of competition Yet inspite of its importance there is relatively littleevidence of extant measures of flexibility inthe literature Rothwell (1992) and Ekvall(1996) propose a range of foci for measures oforganizational and production flexibility suchas lsquocorporate flexibility and responsiveness tochangersquo Coughlan (1994) considers the flexi-bility of resource allocation Several measuresof personnel flexibility are evident such aslsquothe adaptiveness of RampD personnel to tech-nology changesrsquo (Lee et al 1996) and lsquothewillingness to try new procedures and toexperiment with change so as to improve asituation or a processrsquo (Abbey and Dickson1983) At the level of the firm Liao et al(2003) introduce a similar construct ndash lsquoorgan-izational responsivenessrsquo
Organizational complexity the amount ofspecialization and task differentiation report-edly have a positive relationship (Damanpour1996) though Wolfe (1994) argues that it mayfavour initiation at the expense of implemen-tation Administrative intensity that is theratio of managers to total employees favoursadministrative innovation (Damanpour 19911996) but possibly at the cost of other pro-duct or technological innovations (Doughertyand Hardy 1996) Centralization the concen-tration of decision-making authority at the topof the organizational hierarchy and formaliza-tion the degree of emphasis on following rulesand procedures in role performance have both
been shown to have a negative impact on organ-izational innovation (Burns and Stalker 1961Damanpour 1991) Indeed rigidity in rulesand procedures may prohibit organizationaldecision-makers from seeking new sources ofinformation (Vyakarnam and Adams 2001)
Underlying the concept of the workplaceenvironment are issues related to the manage-ment of human resources and the creation ofa culture or climate in which individuals per-ceive innovation to be a desired and supportedorganizational objective There has been con-siderable empirical work on organizationalclimates supportive of the innovation processand several measurement instruments havebeen developed which Mathisen and Einarsen(2004) review The Team Climate Inventory(TCI) (Anderson and West 1996 1998) andthe KEYS instrument for assessing the workenvironment for creativity (Amabile et al 1996)have been found to be robust and rigorous
The TCI has been applied and validated inseveral studies (Agrell and Gustafson 1994Anderson and West 1998 Kivimaumlki et al1997 West and Anderson 1996) Replicationstudies using the TCI have found it canexplain a large part of the variance in teamsrsquoinnovative performance (Agrell and Gustafson1994) The TCI is based around four mainfactors participative safety (how participativeis the team in decision-making proceduresand how psychologically secure do teammembers feel about proposing new andimproved ways of doing things) support forinnovation (the degree of practical support forinnovation attempts contrasted with the rheto-ric of professed support by senior manage-ment) vision (how clearly defined sharedattainable and valued are the teamrsquos objectivesand vision) and task orientation (the com-mitment of the team to achieve the highestpossible standards of task performance includ-ing the use of constructive progress monitor-ing procedures) (Anderson and West 1996)Kivimaumlki et al (1997) suggested a fifth factorlsquointeraction frequencyrsquo relating to the regularityof contact and communication within theproject team
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Innovation management measurement A review
There is general agreement about theimportance of individual and group autonomyin the innovation process (Amabile 1998)Zien and Buckler (1997) emphasize the needfor freedom to experiment and the creation ofsafe havens without which innovation out-come might be constrained Measures ofautonomy mix both qualitative and quantita-tive approaches For example lsquothe degree offreedom personnel have in day-to-day operat-ing decisions such as when to work andhow to solve job problems including freedomfrom constant evaluation and close supervi-sionrsquo (Abbey and Dickson 1983) or lsquopercent-age of RampD portfolio with explicit businessunit andor corporate business managementsign-offrsquo (Tipping and Zeffren 1995) Addition-ally several authors have proposed generalmeasures of autonomy such as lsquofreedom tomake operating decisionsrsquo (Abbey and Dick-son 1983) or lsquodegree of empowermentrsquo (deLeede et al 1999 Tipping and Zeffren1995)
Morale and motivation are dimensions ofthe innovative organization that can be meas-ured as they pertain to individuals ndash lsquotheextent to which personnel are well rewardedrsquo(Abbey and Dickson 1983) to groups ndash lsquoourreward system is more group-based thanindividual-basedrsquo (Parthasarthy and Hammond2002) and to the organization as a whole ndashlsquothe degree to which the organization attemptsto excelrsquo (Abbey and Dickson 1983) Aspectsof morale and motivation that have beenmeasured include trust (Miller and Friesen1982) and job satisfaction which has beenmeasured by Keller (1986) on a 20-item scale
Organizational culture may include a sharedvision and it has been argued that the clearerthe vision the more effective it is as a facilitatorof innovation as it enables focused develop-ment of new ideas that can be assessed moreprecisely (West 1990) Pinto and Prescott(1988) found that the only factor to have pre-dictive power in terms of potential for successat all stages of the innovation process (con-ception planning execution and termination)was having a clearly stated missionvision
while West (1990) contends that the quality ofinnovation is partly a function of visionKeller (1986) adopts Kirtonrsquos (1976) 32-itemadopterndashinnovator inventory to determineindividual and team orientation to innovationVision is operationalized in the team climateinventory (cf Agrell and Gustafson 1994Anderson and West 1996 1998 West andAnderson 1996) and is deconstructed into aseries of sub-dimensions such as clarity shared-ness attainability and value with regard toteam objectives
Another aspect of culture is the propensityto take risks Saleh and Wang (1993) describethis as a willingness to confront risky oppor-tunities and tolerate failure and learn fromdoing so rather than recklessly gamblingSimilarly West (1990) demonstrated thathigher levels of participative safety facilitateinnovation Participative safety is non-judgmental supportive and characterized bysocio-emotional cohesiveness The attractive-ness of the organization as a place to workand undertake innovative activities is used byGeisler (1995) as an indicator of the climatefor innovation measured by numbers of can-didates applying for positions and the ageprofile of scientists and engineers Keller(1986) offers a slightly different perspectiveon participative safety with the constructlsquogroup cohesivenessrsquo which he operational-izes using an established five-item measure
This review has described a wide variety ofmeasures proposed for organizational cultureand structure Unlike some other aspects ofinnovation management this area has receivedextensive measurement attention HoweverHolbek (1988) argues that innovating organi-zations must adopt contrasting structures andclimates as they move from the initiation tothe implementation stages of innovationChesborough and Teece (1996) and Burns andStalker (1961) argue that there is a relation-ship between organizational design and typeof innovation It is a significant gap in innova-tion measurement that there appears to be nomeasures that adequately capture or articulatethis sense of structural shift
copy Blackwell Publishing Ltd 2006 35
March 2006
Portfolio Management
The importance of portfolio management tosuccessful product innovation has recentlyemerged as a key theme in the literature Itis important because of the rapidity at whichresources are consumed in the innovationprocess and the need for these to be managed(Cebon and Newton 1999) The effectivenesswith which an organization manages its RampDportfolio is often a key determinant of itscompetitive advantage (Bard et al 1988) Thefocus of portfolio management is on makingstrategic technological and resource choicesthat govern project selection and the futureshape of the organization (Cooper et al 1999)The problems of allocation of resources evalu-ation selection and termination of projects inachieving the optimal portfolio have beenextensively investigated The models all havethe objective of devising means to allocateresources to projects to obtain the optimalbalance in the product development portfoliothat is arriving at a portfolio that optimizesthe trade-off between returns and risks
The process of selecting innovation projectsrequires evaluation and resource allocationunder uncertain conditions It is argued that asystematic process guided by clear selectioncriteria can help optimize the use of limitedresources and enhance an organizationrsquoscompetitive position (Hall and Nauda 1990)The earliest models used return on investmentas the primary decision criteria (Bard et al 1988)Following this increasingly sophisticatedmathematical tools were developed to resolvewhat Schmidt and Freeland (1992) describe asthe constrained optimization problem that isto maximize the output (according to specifiedcriteria) from a subset of available inputsThese project selection models lsquohave beenvirtually ignored by industryrsquo (Schmidt andFreeland 1992 190) Part of the reason forthis is the inherent complexity of some ofthese models but also that they fail to takeinto account organizational decision andcommunication processes More recentlymodels have tried to take account of these
more qualitative factors involved in decisionprocesses
Scoring models require respondents tospecify the merit of any project proposalaccording to a set of a priori criteria whichmay be objective or subjective (Hall andNauda 1990) Economic and benefit modelsattempt to compute the cost benefit or finan-cial risk of pursuing a specific project whilemathematical programming approaches seekto optimize some objective function(s) subjectto specified resource constraints Algorithmsof varying complexity exist requiring moni-toring and significant data entry and whilemany are conceptually attractive surveys donot show widespread utilization of thesetechniques (Hall and Nauda 1990) Theseapproaches are all based on financial meas-ures such as internal rate of return net presentvalue and return on investment At the otherend of the spectrum qualitative approachessuch as peer review and mental checklistsrely on subjective perceptions and measuresof portfolio balance (Cooper et al 2001Henriksen and Traynor 1999)
Cooper et al (1999) find that best performersuse explicit formalized tools and consist-ently apply them to all projects considered tobelong to a portfolio A series of measures canbe identified that evaluate the whole portfolioof innovation projects to answer questionssuch as lsquois it balanced in terms of quantity ofshort- and long term-projectsrsquo and lsquois there abalance between high and low risk projectsand large and small projectsrsquo (Brenner 1994Cooper et al 2001) Another set seeks to iden-tify the extent to which portfolio evaluationmeasures are formalized within the organiza-tionrsquos processes (Cebon and Newton 1999Chiesa et al 1996 Farrukh et al 2000 Millerand Friesen 1982) Yet another approach is toview project evaluation and selection as anorganizational capability and attempt to deter-mine a level of proficiency (Szakonyi 1994)Finally there is a series of post hoc measuresof the appropriateness of project selections inthe light of results and alignment with busi-ness objectives (Lee et al 1996)
36 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Project Management
Project management is concerned with theprocesses that turn the inputs into a marketa-ble innovation The innovation process iscomplex comprising a myriad of events andactivities some of which can be identified as asequence and some of which occur concur-rently and it is clearly possible that innova-tion processes will differ to some degreeacross organizations and even within organi-zations on a project-by-project basis Havingan efficient process that is able to manage theambiguity of the innovation is universally agreedto be critical to innovation (Globe et al 1973)
Various approaches have been taken tomodelling innovation processes as a series ofevents (Zaltman et al 1973) as a social interac-tion (Voss et al 1999) as a series of transactions(Nelson and Winter 1982) and as a process ofcommunication (Farrukh et al 2000) The his-tory of project management research is partlycharacterized by a debate regarding the extentto which events and activities within the processoccur in linearly sequential discrete identifiablestages (Zaltman et al 1973) or whether eventsare more disorganized (King 1992) or evenchaotic (Koput 1997) However despite thesedifferent viewpoints there are a number ofcommon elements that can be summarized asthe major components of the innovation projectmanagement These are project efficiencytools communications and collaboration
Several studies make efforts to measureproject management efficiency mostly in theform of comparisons between budget and actual(project costs project duration revenue fore-casting) Another measure of project manage-ment success is speed Innovation speed hasbeen positively correlated with product qual-ity or the degree to which it satisfies customerrequirements measures include speed (Hauserand Zettelmeyer 1997) performance againstschedule (Chiesa and Masella 1994) and dura-tion of the process (Cebon and Newton 1999)
To achieve efficiency it is widely recom-mended that organizations seeking to innovateshould establish formal processes for innovat-
ing and make use of tools and techniquesthat may facilitate innovative endeavours Thestage-gate process (Cooper 1990) is possiblythe most familiar of these but other method-ologies for innovation project managementexist including Phased Development Productand Cycle-time Excellence and Total Design(see Jenkins et al (1997) for a discussion)These methodologies have in common theseparation of the product development processinto structured and discrete stages which eachhave milestones in the form of quality controlcheckpoints at which stopgo decisions are madewith regard to the progress of the project Thesehighly structured approaches to the manage-ment of the innovation process began toemerge in the 1990s (Veryzer 1998) The useof structured tools and processes can bemeasured by project process evaluations forexample the use of a formal problem-findingproblem-solving cycle (Bessant 2003) the useof formal post-launch evaluation procedures(Atuahene-Gima 1995) or the use of certifiedprocesses (Chiesa et al 1996) These rathergeneral process measures have been supple-mented by measures of the use of specificinstruments and tools such as interactiveCAD or CAM (Maylor 2001) or the use ofcomputer-integrated manufacturing processes(Parthasarthy and Hammond 2002) but wenote that these measures betray the technologicaland NPD heritage that underpins many of theinnovation measures identified in this reviewEquivalents for service industry public ornot-for-profit sector innovations are somewhatlacking in the literature and constitute aresearch gap
Communications are important in projectmanagement Damanpour (1991) demon-strated the existence of a positive relationshipbetween internal communication and innova-tion Internal communication facilitates thedispersion of ideas within an organizationincreases the diversity and also contributes tothe team lsquoclimatersquo Communication can bemeasured by various integration mechanismseg committees numbers of meetings andcontacts (Damanpour 1991) There are also
copy Blackwell Publishing Ltd 2006 37
March 2006
measures of external communications whichtend to focus on whether communication istaking place the level at which it occurs andwith whom (Cebon and Newton 1999 Leeet al 1996 Rothwell 1992 Souitaris 2002)These measures of internal and external com-munication in the literature are based on bothsubjective evaluations and objective frequencycounts Subjective measures include lsquowe alwaysconsult supplierscustomers on new productideasrsquo (Parthasarthy and Hammond 2002) andlsquodegree of organization members involved andparticipating in extra-organizational professionalactivitiesrsquo (Damanpour 1991) Objective countsinclude (Damanpour 1991) lsquoextent of commu-nication amongst organizational units or groupsmeasured by various integrating mechanismssuch as numbers of committees and frequencyof meetingsrsquo (Anderson and West 1998)lsquofrequency of formal meetings concerningnew ideasrsquo (Souitaris 2002 Szakonyi 1994)lsquohow well do the technical and finance peoplecommunicate with one anotherrsquo
It is widely recognized that collaboratingwith suppliers (Bessant 2003) and customers(von Hippel 1986) can also make a significantcontribution to the innovation processMeasures of collaborative working includethe use of guest engineers (Maylor 2001) thepercentage of projects in co-operation withthird parties (Kerssens-van Drongelen andBilderbeek 1999) and the extent to whichdecision-making at top levels is characterizedby cross-functional discussions (Miller andFriesen 1982) In addition Jassawalla andSashittal (1999) identify some characteristicsof internal collaboration ie that teams arecharacterized by their mindfulness levels ofat-stakeness synergy and transparency butthey do not suggest how these aspects mightbe measured which constitutes a furtherresearch gap
Commercialization
Commercialization can be considered to bethe second of the two phases in Zaltman et alrsquos(1973) conceptualization of the innovation
process that is lsquoimplementationrsquo This canmean taking an innovation to market (Chakra-vorti 2004) but may also include convincingproduction managers to adopt a series of newtechniques available to them (Single andSpurgeon 1996) Indeed the successful intro-duction of new products and services intomarkets is important for the survival andgrowth of organizations Kelm et al (1995)regard commercialization as a transitionalphase in which the organization becomesless reliant on its technological capabilities(important during the activities of initiation)but more dependent on market dynamicsCommercialization is concerned with makingthe innovative process or product a commer-cial success it includes issues such as market-ing sales distribution and joint venturesWhile technical capabilities are important forthe early stages of the innovation process anddevelopment activities for the launch andimplementation stage it is marketing capabili-ties (market investigation market testingpromotion etc) that are significant (Calantoneand di Benedetto 1988 Globe et al 1973)Verhaeghe and Kfir (2002) consider aspectsof commercialization under the headings ofmarket analysis and monitoring reaching thecustomer and market planning
Firm-level measures of the launch or com-mercialization process appear to be relativelythin In their description of the RampD processBalachandra and Brockhoff (1995) character-ize the commercialization stage as requiringlsquobig bucksrsquo market reviews and organiza-tional commitment Most measures appear tobe not much more sophisticated than thisMeasures are frequently restricted to numbersof products launched in a given period (egYoon and Lilien 1985) There is thoughsome focus on market analysis and monitor-ing (Verhaeghe and Kfir 2002) Song andParry (1996) employ a set of measures oflaunch proficiency (salesforce distributionaland promotional support) that directly addressthe lsquoadequacyrsquo of the organizationrsquos facilities inthese areas as do Avlonitis et al (2001) Andthere is a limited mention of the commercial
38 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
intentions of an organizationrsquos competitors(Calantone and di Benedetto 1988) Thethemes of proficiency of personnel in this area(eg Atuahene-Gima 1995 Cebon and New-ton 1999) of adherence to a commercializa-tion schedule (eg Griffin and Page 1993) andof formal post-launch reviews (Atuahene-Gima 1995 von Zedtwitz 2002) can also befound in the literature
Even in the work that addresses post-project reviews very little attention is directedtowards measuring innovation launch orcommercialization However this comes aslittle surprise as Hultink et al (2000) recentlyobserved that little work has been done in thearea perhaps because at least in the innova-tion literature launch activities appear to beconsidered the domain of other specialistsparticularly marketers and the process is seenas separate from innovation In their studythey investigated launch decisions associatedwith success for consumer and business-to-business products Much of the literature thatconsiders launch and commercialization doesso from the viewpoint of the adopter andassesses rates of adoption and diffusion ofinnovations over time across populations(Kessler and Chakrabarti 1996 Van DenBulte 2000)
The area of commercialization appears tobe the least developed of the issues involvedin innovation management This is a huge gapbecause without this last step the previoussteps of assembling inputs project manage-ment etc will not result in a commerciallyviable outcome for the firm We believe thatthis area of innovation is in urgent need offurther development from both theory andmeasurement viewpoints
Discussion
Innovation management measurement is acritical discipline for both academics andpractitioners The capacity of organizations toinnovate is determined by multiple factors thatrelate both to their own internal organizationand to their market environment (Rothwell
et al 1974) and the task of generating andthen converting ideas into usable and market-able products requires high levels of inter-functional co-ordination and integration Thispaper opened with the general observationthat innovation measurement does not appearto take place routinely within managementpractice and that where it does it tends tofocus on output measures Further from therelatively small number of empirical studiesof measurement in practice measurement ofinnovation management appears to be under-taken infrequently in an ad hoc fashion andrelies on dated unbalanced or under-specifiedmodels of the innovation management phe-nomenon This suggests that a large part ofthe contemporary conceptualization of theinnovation management phenomenon is over-looked in practitionersrsquo measurement prac-tices and consequently that opportunities forthe more efficient and effective managementof the innovation process are not realizedSome possible reasons for this state of affairsare failure of academics to communicate ade-quately inconsistency inaccessibility andcomplexity of measures and poor synthesisand packaging
Following a review and synthesis of theliterature we proposed a seven-dimensionalconceptualization of the innovation manage-ment phenomenon and applied it to an exam-ination of the measurement problem Throughthe application of this framework to their ownparticular context it is suggested that practi-tioners will be able to conduct an evaluationof their own innovation management activityidentify gaps weaknesses or deficiencies andalso improvement potential Further it ishoped that organizations applying the frame-work will be able to tease out areas whereinnovation is only nominally adopted in theirprocesses and identify areas where attentionand resources might be focused
From the perspective of its management itis no longer sufficient to treat innovation as alinear process where resources are channelledat one end from which emerges a new prod-uct or process The measurement framework
copy Blackwell Publishing Ltd 2006 39
March 2006
presented in Table 2 shows the breadth andvariety of elements of innovation managementthat ideally need to be measured There havebeen several studies that have investigated thelimitations of various approaches to measure-ment (eg Werner and Souder 1997) and ofspecific measures (eg Trajtenberg 1990) asthey relate to the practice of innovation Thechoice of an appropriate RampD measurementmetric depends on the userrsquos needs in terms ofcomprehensiveness of measurement type ofRampD being measured available data andamount of effort the user can afford to allocateto the exercise Nonetheless the commonciting across various papers of the measuresnoted in the innovation management frame-work presented here suggests that a base setof innovation management measures isimplicitly present in the literature eventhough they may be fragmented in appearanceand presentation By pulling together theinnovation management framework fromdiverse sources this paper aims to bring suchissues into the open and identify relevantresearch gaps Table 2 can be viewed as thebasis for a balanced scorecard (Kaplan andNorton 1992) for innovation managementthat is as a balanced set of areas that need tobe measured in order to gain insight into anorganizationrsquos holistic ability to manage inno-vation Such multidimensional approaches tomeasurement have been found in other areasof management to be an improvement on sim-ple one-dimensional measures and to be ableto capture both short- and long-term aspectsof value creation in the firm (Phelps 2004)
We have identified a large number of meas-ures and approaches in a variety of innovationmanagement areas and we have constructed ageneric set of innovation management meas-urement areas to act as a framework for bal-anced measurement However in several ofthese areas measurement gaps have beenidentified These gaps are of two types valid-ity gaps and omission gaps Validity gaps arisewhere there is insufficient evidence that pro-posed measures actually do capture drivers oroutputs of innovation management for example
we have noted the objections to counts ofpatents or increasing expenditure on RampD beingused as measures of innovative organizationsSimilarly there is an absence of evidence thatthe large number of subjective perceptions ofinnovation management practices proposed(lsquowe do Arsquo lsquowe are good at Brsquo) actually relateto innovation management performance
Omission gaps occur where the importanceof an aspect of innovation management is sup-ported in the literature but measures for thisaspect are lacking Omission gaps are particu-larly prevalent in the elements of innovationmanagement such as knowledge managementinnovation strategy and commercializationthat do not feature strongly in the literature ontechnological and manufacturing-based inno-vation Another area traditionally not givenmuch emphasis in this literature is organiza-tion and culture which fortunately is bettertreated by the organizational behaviour litera-ture where a number of measures have beendeveloped Much of the current state of meas-urement practice can be traced back to the dis-ciplinersquos early manufacturing RampD and NPDfocus While product innovation is undoubt-edly important it is only one dimension of anorganizationrsquos innovation agenda Process andorganizational innovations are recognizedtoo as critical for competitiveness yet theseperspectives are inadequately represented inmeasurement terms
General areas of omission in this fieldrelate to an over-reliance on financial meas-ures rather than process measures for exam-ple the use of financial measures of portfoliooptimization but an absence of portfoliocapability measures a similar reliance oncodified knowledge such as patents to theexclusion of more intangible measures suchas tacit knowledge the measurement of levelsof resources or activities with no indication ofwhat an optimal level would be the measure-ment of drivers of innovation without meas-ures of whether these drivers are aligned witheach other and with firm strategy measures ofpresence that do not measure quality (eg theuse of dichotomous (yesno) measures that do
40 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
not indicate how well an action is implementedand measures of the presence of leadership(such as champions) but not of quality ofleadership) a general absence of measuresfor important properties of organizationalstructures such as flexibility and a lack ofmeasures of the match between structure andenvironment a technological and NPD bias toproject management measures and a relativeabsence of measures for service sectors apaucity of measures for internal communica-tions and a general lack of measures forcommercialization management ndash in particulararound marketing and sales capabilities forinnovative products and services All thesegaps provide the potential for further researchin innovation management measurement
The absence of an accepted framework ofinnovation management measures leads notonly to the gaps identified above but also toother problems in the literature One is that itis frequently unclear whether or not the met-rics used are of the researchersrsquo own devisingdrawn from the literature or are what are usedby the organizations being studied Nor is italways clear when metrics are devised orrecommended whether they are intended foruse in a research capacity or for managementtasks Further the measures proposed in theliterature often seem to be proposed abstractlywith little consideration given to the use ofmeasures as a management tool in the day-to-day context of managing innovation In theabsence of a comprehensive framework forinnovation management measurement organ-izations will inevitably resort to ad hoc andpartial metrics which can encourage wastefulpractice (eg measuring innovation managementcapability according to annual RampD spend)We hope that the framework constructed inthis paper will be useful in the constructionof comprehensive measures of innovationmanagement
Acknowledgements
The research reported here was supported bya grant from Cranfield School of Management
the authors gratefully acknowledge this supportFurther the authors are grateful to the editorsand two anonymous reviewers for their helpfuland insightful comments on previous versionsof this paper
Note
1 Corresponding author Telephone +44 (0) 207594 9137 e-mail radamsimperialacuk
References
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Agrell A and Gustafson R (1994) The teamclimate inventory (TCI) and group innovation apsychometric test on a Swedish sample of workgroups Journal of Occupational and Organiza-tional Psychology 67 143ndash151
Alegre-Vidal J Lapiedra-Alcami R and Chiva-Gomez R (2004) Linking operations strategy andproduct innovation an empirical study of Spanishceramic tile producers Research Policy 33 829ndash839
Amabile TM (1998) How to kill creativity HarvardBusiness Review SeptemberndashOctober 77ndash87
Amabile TM Conti R Coon H Lazenby J andHerron M (1996) Assessing the work environ-ment for creativity Academy of Management Jour-nal 39 1154ndash1184
Ambrosini V and Bowman C (2001) Tacit know-ledge some suggestions for operationalisationJournal of Management Studies 38 811ndash829
Anderson N and West MA (1996) The teamclimate inventory development of the TCI and itsapplications in teambuilding for innovativenessEuropean Journal of Work and Organizational Psy-chology 5 53ndash66
Anderson NR and West MA (1998) Measuringclimate for work group innovation developmentand validation of the team climate inventory Jour-nal of Organizational Behavior 19 235ndash258
Atuahene-Gima K (1995) An exploratory analysisof the input of market orientation on new productperformance a contingency approach Journal ofProduct Innovation Management 12 275ndash293
Avlonitis GJ Papastathopoulou PG and Gounaris SP(2001) An empirically-based typology of productinnovativeness for new financial services success
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March 2006
and failure scenarios Journal of Product Innova-tion Management 18 324ndash342
Balachandra R and Brockhoff K (1995) Are RampDproject termination factors universal Research-Technology Management 38 31ndash36
Balachandra R and Friar J (1997) Factors for suc-cess in RampD projects and new product innovationa contextual framework IEEE Transactions onEngineering Management 44 276ndash287
Baldridge JV and Burnham RA (1975) Organiza-tional innovation ndash individual organizational andenvironmental impacts Administrative ScienceQuarterly 20 165ndash176
Bantel KA and Jackson SE (1989) Top manage-ment and innovations in banking does the compo-sition of the top team make a difference StrategicManagement Journal 10 107ndash124
Barclay I (1992) The new product developmentprocess part 2 Improving the process of new prod-uct development RampD Management 4 307ndash317
Bard JF Balachandra R and Kaufmann PE(1988) An interactive approach to RampD projectselection and termination IEEE Transactions onEngineering Management 35 139ndash146
Barney J (1991) Firm resources and sustained com-petitive advantage Journal of Management 1799ndash120
Becker SW and Whisler TL (1973) The innova-tive organization a selective view of current theoryand research In Wills G Hayhurst R and Midg-ley D (eds) Creating and Marketing New Prod-ucts London Crosby Lockwood Staples
Bess G (1998) A first stage organization life cyclestudy of six emerging nonprofit organizations inLos Angeles Administration in Social Work 2235ndash52
Bessant J (2003) High Involvement InnovationBuilding and Sustaining Competitive AdvantageThrough Continuous Change Chichester JohnWiley
Bessant J and Francis D (1997) Implementing thenew product development process Technovation17 189ndash197
Blackler F (1995) Knowledge knowledge work andorganizations an overview and interpretationOrganization Studies 16 1021ndash1046
Bougrain F and Haudeville B (2002) Innovationcollaboration and SMEs internal research capaci-ties Research Policy 31 735ndash747
Brenner MS (1994) Practical RampD project prioriti-zation Research Technology Management 37 38ndash43
Brown MG and Svenson RA (1988) MeasuringRampD productivity Research-Technology Manage-ment JulyndashAugust 11ndash15
Brown SL and Eisenhardt KM (1997) The art ofcontinuous change linking complexity theory andtime-paced evolution in relentlessly shifting organiza-tions Administrative Science Quarterly 42 1ndash34
Burgelman RA Christensen CM and Wheel-wright SC (2004) Strategic Management of Tech-nology and Innovation 4th edition New YorkMcGraw HillIrwin
Burns TR and Stalker GM (1961) The Manage-ment of Innovation London Tavistock
Calantone RJ and di Benedetto CA (1988) Anintegrative model of the new product developmentprocess an empirical validation Journal of Prod-uct Innovation Management 5 201ndash215
Cebon P and Newton P (1999) Innovation in firmstowards a framework for indicator developmentMelbourne Business School Working Paper 99-9
Chakravorti B (2004) The new rules for bringinginnovations to market Harvard Business Review82 58ndash67
Chen C-J (2004) The effects of knowledgeattribute alliance characteristics and absorptivecapacity on knowledge transfer performance RampDManagement 34 311ndash321
Chesborough HW and Teece DJ (1996) When isvirtual virtuous Organizing for innovation Har-vard Business Review JanuaryndashFebruary 65ndash73
Chiesa V and Masella C (1994) Searching for aneffective measure of RampD performance In Pro-ceedings 2nd International Product DevelopmentManagement Conference Gothenburg Sweden30ndash31 May Brussels European Institute forAdvanced Studies in Management
Chiesa V Coughlan P and Voss A (1996) Devel-opment of a technical innovation audit Journal ofProduct Innovation Management 13 105ndash136
Cohen WM and Levinthal DA (1990) Absorptivecapacity a new perspective on learning and inno-vation Administrative Science Quarterly 35 128ndash152
Cooper RG (1979a) The dimensions of industrialnew product success and failure Journal of Mar-keting 43 93ndash103
Cooper RG (1979b) Identifying industrial newproduct success Project NewProd Industrial Mar-keting Management 8 124ndash135
Cooper RG (1984) The strategyndashperformance linkin product innovation RampD Management 14 247ndash259
42 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Cooper RG (1990) Stage-gate systems a new toolfor managing new products Business Horizons 3344ndash56
Cooper RG and Kleinschmidt EJ (1990) Newproduct success factors a comparison of lsquokillsrsquoversus successes and failures RampD Management20 47ndash64
Cooper RG and Kleinschmidt EJ (1995) Bench-marking the firmrsquos critical success factors in newproduct development Journal of Product Innova-tion Management 12 374ndash391
Cooper RG Edgett SJ and Kleinschmidt EJ(1999) New product portfolio management prac-tices and performance Journal of Product Innova-tion Management 16 333ndash351
Cooper RG Edgett SJ and Kleinschmidt EJ(2001) Portfolio Management for New Products2nd edition Cambridge MA Perseus
Cooper RG Edgett SJ and Kleinschmidt EJ (2004)Benchmarking best NPD practices Research-Technology Management 47 50ndash59
Cordero R (1990) The measurement of innovationperformance in the firm an overview ResearchPolicy 19 185ndash192
Cormican K and OrsquoSullivan D (2004) Auditingbest practice for effective product innovationmanagement Technovation 24 819ndash829
Coughlan P Chiesa V and Voss C (1994) Evalu-ating leadership as an enabler of innovation InProceedings 2nd International Product Develop-ment Management Conference GothenburgSweden 30ndash31 May Brussels European Institutefor Advanced Studies in Management
Covin JG and Slevin DP (1989) Strategic manage-ment of small firms in hostile and benign environ-ments Strategic Management Journal 10 75ndash87
Daft R (1978) A dual-core model of organizationalinnovation Academy of Management Journal 21193ndash210
Damanpour F (1991) Organizational innovation ameta-analysis of effects of determinants and mod-erators Academy of Management Journal 34 555ndash590
Damanpour F (1996) Organizational complexity andinnovation developing and testing multiple contin-gency models Management Science 42 693ndash716
Davis MC (1998) Knowledge management Infor-mation Strategy The Executiversquos Journal 15 11ndash22
De Brentani U (1991) Success factors in developingnew business services European Journal of Mar-keting 25 33ndash60
De Leede J Nijhof AH and Fisscher OA (1999)The myth of self managing teams a reflection onthe allocation of responsibilities between individu-als teams and the organisation Journal of BusinessEthics 21 203ndash215
Deeds DL (2001) The role of RampD intensitytechnical development and absorptive capacity increating entrepreneurial wealth in high technologystart-ups Journal of Engineering and TechnologyManagement 18 29ndash47
Denyer D and Neely A (2004) Introduction to spe-cial issue innovation and productivity performancein the UK International Journal of ManagementReviews 45 131ndash135
Di Benedetto CA (1996) Identifying the key suc-cess factors in new product launch Journal ofProduct Innovation Management 16 530ndash544
Dodgson M and Hinze S (2000) Indicators used tomeasure the innovation process defects and possi-ble remedies Research Evaluation 8 101ndash114
Dougherty D and Cohen M (1995) Product inno-vation in mature firms In Bowman E and KogutB (eds) Redesigning the Firm New York OxfordUniversity Press
Dougherty D and Hardy C (1996) Sustained prod-uct innovation in large mature organizations over-coming innovation-to-organization problemsAcademy of Management Journal 39 1120ndash1153
DTI (1998) An Audience With Innovation Innovationin Management London Department of Trade andIndustry
Dyer B and Song XM (1998) Innovation strategyand sanctioned conflict a new edge in innovationJournal of Product Innovation Management 15505ndash519
Ekvall G (1996) Organizational climate for creativ-ity and innovation European Journal of Work andOrganizational Psychology 5 105ndash123
Ernst H (2002) Success factors of new productdevelopment a review of the empirical literatureInternational Journal of Management Reviews 41ndash40
Farrukh C Phaal R Probert D Gregory M andWright J (2000) Developing a process for therelative valuation of RampD programmes RampDManagement 30 43ndash53
Frenkel A Maital S and Grupp H (2000) Meas-uring dynamic technical change a technometricapproach International Journal of TechnologyManagement 20 429ndash441
Galunic DC and Rodan S (1998) Resource recom-binations and the firm knowledge structures and
copy Blackwell Publishing Ltd 2006 43
March 2006
the potential for Schumpeterian innovationStrategic Management Journal 19 1193ndash1201
Geisler E (1995) An integrated costndashperformancemodel of research-and-development evaluationOmega ndash International Journal of ManagementScience 23 281ndash294
Glaser BG and Strauss AL (1967) The Discoveryof Grounded Theory Strategies for QualitativeResearch London Aldine
Globe S Levy GW and Schwartz CM (1973)Key factors and events in the innovation processResearch Management 16 8ndash15
Goffin K and Pfeiffer R (1999) Innovation Man-agement in UK and German Manufacturing Com-panies London Anglo-German Foundation for theStudy of Industrial Society
Grant RM (1991) The resource-based theory ofcompetitive advantage implications for strategyformulation California Management Review 33114ndash135
Greve HR (2003) A behavioral theory of RampDexpenditures and innovations evidence fromshipbuilding Academy of Management Journal 46685ndash702
Griffin A (1997) PDMA research on new productdevelopment practices updating trends and bench-marking best practices Journal of Product Innova-tion Management 14 429ndash458
Griffin A and Page AL (1993) An interim reporton measuring product development success andfailure Journal of Product Innovation Manage-ment 10 291ndash308
Griliches Z (1990) Patent statistics as economicindicators a survey Journal of Economic Litera-ture 28 1661ndash1707
Hall DL and Nauda A (1990) An interactiveapproach for selecting IRampD projects IEEE Trans-actions on Engineering Management 37 126ndash133
Hauser JR and Zettelmeyer F (1997) Metrics toevaluate RDampE Research-Technology Manage-ment 40 32ndash38
Henriksen AD and Traynor AJ (1999) A practicalRampD project-selection scoring tool IEEE Trans-actions on Engineering Management 46 158ndash170
Hipp C and Grupp H (2005) Innovation in theservice sector the demand for service specific-innovation measurement concepts and typologiesResearch Policy 34 517ndash535
Holbek J (1988) The innovation design dilemmasome notes on its relevance and solutions InGroslashnhaug K and Kaufmann G (eds) Innovation
A Cross-Disciplinary Perspective NorwegianUniversity Press pp 253ndash277
Hope Hailey V (2001) Breaking the mould Innova-tion as a strategy for corporate renewal Inter-national Journal of Human Resource Management12 1126ndash1140
Hull R Coombs R and Peltu M (2000) Know-ledge management practices for innovation anaudit tool for improvement International Journalof Technology Management 20 633ndash656
Hultink EJ Hart S Robben HSJ and Griffin A(2000) Launch decisions and new product successan empirical comparison of consumer and indus-trial products Journal of Product Innovation Man-agement 17 5ndash23
Jassawalla AR and Sashittal HC (1999) Buildingcollaborative cross-functional new product teamsAcademy of Management Executive 13 50ndash63
Jenkins S Forbes S Durrani TS and BanerjeeSK (1997) Managing the product developmentprocess 1 An assessment International Journal ofTechnology Management 13 359ndash378
Kaplan RS and Norton DP (1992) The balancedscorecard ndash measures that drive performance HarvardBusiness Review JanuaryndashFebruary 71ndash79
Keller RT (1986) Predictors of performance ofproject groups in RampD organizations Academy ofManagement Journal 29 715ndash726
Kelm KM Narayanan VK and Pinches GE (1995)Shareholder value creation during research-and-development innovation and commercialization stagesAcademy of Management Journal 38 770ndash786
Kerssens-van Drongelen IC and Bilderbeek J(1999) RampD performance measurement morethan choosing a set of metrics RampD Management29 35ndash46
Kerssens-van Drongelen IC and de Weerd-Nederhof PC (1999) The use of performancemeasurement tools for balancing short- and long-term NPD performance International Journal ofInnovation Management 3 397ndash426
Kessler EH and Chakrabarti AK (1996) Innova-tion speed a conceptual model of context anteced-ents and outcomes Academy of ManagementReview 21 1143ndash1191
Kim B and Oh H (2002) An effective RampD per-formance measurement system survey of KoreanRampD researchers Omega ndash International Journalof Management Science 30 19ndash31
Kim J and Wilemon D (2002) Strategic issues inmanaging innovationrsquos fuzzy front-end EuropeanJournal of Innovation Management 5 27ndash39
44 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Kimberly JR (1981) Managerial innovation InNystrom PC and Starbuck WH (eds) Handbookof Organizational Design Vol 1 New YorkOxford University Press pp 84ndash104
King N (1992) Modelling the innovation process anempirical comparison of approaches Journal ofOccupational and Organizational Psychology 6589ndash100
Kirton MJ (1976) Adaptors and innovators adescription and measure Journal of Applied Psy-chology 61 622ndash629
Kivimaumlki M Kuk G Elovainio M Thomson LKalliomaumlki-Levanto T and Heikkilauml A (1997)The team climate inventory (TCI) ndash four or fivefactors Testing the structure of TCI in samples oflow and high complexity jobs Journal of Occupa-tional and Organizational Psychology 70 375ndash389
Kivimaumlki M Lansisalmi H Elovainio M Heik-kila A Lindstrom K Harisalo R Sipila K andPuolimatka L (2000) Communication as a deter-minant of organizational innovation RampD Man-agement 30 33ndash42
Kleinknecht A (1987) Measuring RampD in smallfirms how much are we missing Journal of Indus-trial Economics 36 253ndash256
Koen P Ajamian G Burkart R Clamen ADavidson J DrsquoAmore R Elkins C Herald KIncorvia M Johnson A Karol R Seibert RSlavejkov A and Wagner K (2001) Providingclarity and a common language to the lsquofuzzy front endrsquoResearch-Technology Management 44 46ndash55
Koput K (1997) A chaotic model of innovativesearch some answers many questions Organiza-tion Science 8 528ndash542
Lawrence PR and Lorsch JW (1967) Organizationand Environment Harvard MA Harvard Univer-sity Press
Lee M Son B and Lee H (1996) Measuring RampDeffectiveness in Korean companies Research-Technology Management 39 28ndash31
Leonard D and Sensiper S (1998) The role of tacitknowledge in group innovation California Man-agement Review 40 112ndash132
Leseure M Birdi K Bauer J Denyer D andNeely A (2004) Adoption of Promising PracticeA Systematic Review of the Literature LondonAdvanced Institute of Management Research
Li HY and Atuahene-Gima K (2001) Productinnovation strategy and the performance of newtechnology ventures in China Academy of Man-agement Journal 44 1123ndash1134
Liao J Welsch H and Stoica M (2003) Organiza-tional absorptive capacity and responsivenessan empirical investigation of growth-orientedSMEs Entrepreneurship Theory and Practice 2863ndash86
Linstone HA and Turoff M (eds) (2002) The Del-phi Method Techniques and Applications httpwwwisnjitedupubsdelphibook
Loch C Stein L and Terwiesch C (1996) Meas-uring development performance in the electronicsindustry Journal of Product Innovation Manage-ment 13 3ndash20
Mathisen GE and Einarsen S (2004) A review ofinstruments assessing creative and innovative envi-ronments within organizations Creativity ResearchJournal 16 119ndash140
Maylor H (2001) Assessing the relationshipbetween practice changes and process improve-ment in new product development Omega ndashInternational Journal of Management Science 2985ndash96
McAdam RMS (1999) The process of knowledgemanagement within organizations a critical assess-ment of both theory and practice Knowledge andProcess Management 6 101ndash113
McManus RJ Wilson S Delaney BC Fitzmau-rice DA Hyde CJ Tobias RS Jowett S andHobbs FDR (1998) Review of the usefulness ofcontacting other experts when conducting a litera-ture search for systematic reviews British MedicalJournal 317 1562ndash1563
Miles RE and Snow CC (1978) Organization StrategyStructure and Process New York McGraw-Hill
Miller D and Friesen PH (1982) Innovation inconservative and entrepreneurial firms two modelsof strategic momentum Strategic ManagementJournal 3 1ndash24
Mintzberg H (1978) Patterns in strategy formationManagement Science 24 934ndash948
Mitroff I (1987) Business Not As Usual Rethinkingour Individual Corporate and Industrial Strategiesfor Global Competition London Jossey-Bass
Moenaert RK De Meyer A Souder WE andDeschoolmeester D (1995) RampDMarketing com-munication during the fuzzy front-end IEEETransactions on Engineering Management 42243ndash257
Neely A and Hii J (1998) Innovation and BusinessPerformance A Literature Review Report producedfor Government Office for the Eastern RegionCambridge The Judge Institute of ManagementStudies University of Cambridge
copy Blackwell Publishing Ltd 2006 45
March 2006
Nelson R and Winter G (1982) An EvolutionaryTheory of Economic Change Cambridge MABelknap Press
Nohria N and Gulati R (1996) Is slack good or badfor innovation Academy of Management Journal39 1245ndash1264
Nonaka I (1991) The knowledge-creating companyHarvard Business Review NovemberndashDecember96ndash104
Nonaka I and Takeuchi H (1995) The KnowledgeCreating Company How Japanese CompaniesCreate the Dynamics of Innovation New YorkOxford University Press
OrsquoBrien JP (2003) The capital structure implica-tions of pursuing a strategy of innovation StrategicManagement Journal 24 415ndash431
OrsquoReilly CA and Tushman ML (1997) Using cul-ture for strategic advantage promoting innovationthrough social control In Tushman ML andAnderson P (eds) Managing Strategic Innovationand Change A Collection of Readings New YorkOxford University Press pp 200ndash216
Oliver N Dewberry E and Dostaler I (1999) Newproduct development performance and practice aninternational benchmarking study in the consumerelectronics industry In Proceedings 6th Inter-national Product Development Management Confer-ence Cambridge UK Brussels European Institutefor Advanced Studies in Management
Pakes A and Griliches Z (1980) Patents and RampDat the firm level a first report Economic Letters 5377ndash381
Parthasarthy R and Hammond J (2002) Productinnovation input and outcome moderating effectsof the innovation process Journal of Engineeringand Technology Management 19 75ndash91
Patterson F (2003) Innovation potential indicatorAvailable at wwwoppcouk
Phelps B (2004) Smart Business Metrics MeasureWhat Really Counts and Manage What Makes theDifference London FT-Prentice Hall
Pinto JK and Prescott JE (1988) Changes in crit-ical success factors over the stages in the projectlife cycle Journal of Management 14 5ndash18
Pitt M and Clarke K (1999) Competing on compe-tence a knowledge perspective on the managementof strategic innovation Technology Analysis andStrategic Management 11 301ndash316
Pittaway L Robertson M Munir K Denyer D andNeely A (2004) Networking and Innovation in theUK a Systematic Review of the Literature LondonAdvanced Institute of Management Research
Porter ME and Ketels CHM (2003) UK Compet-itiveness Moving to the Next Stage DTI Econom-ics Paper No 3 URN 03899
Pugh DS Hickson DJ Hinings CR and TurnerC (1969) The context of organization structuresAdministrative Science Quarterly 14 91ndash114
Ramanujam V and Mensch GO (1985) Improvingthe strategyndashinnovation link Journal of ProductInnovation Management 2 213ndash223
Richard O McMillan A Chadwick K and DwyerS (2003) Employing an innovation strategy inracially diverse workforces ndash effects on firm per-formance Group amp Organization Management 28107ndash126
Rickards T (1991) Innovation and creativity treesand pathways RampD Management 21 97ndash108
Rochford L (1991) Generating and screening newproduct ideas Industrial Marketing Management20 287ndash296
Rothwell R (1992) Successful industrial innovationcritical factors for the 1990s RampD Management22 221ndash239
Rothwell R Freeman C Horseley A JervisVTP Robertson AB and Townsend J (1974)SAPPHO updated ndash Project SAPPHO phase IIResearch Policy 3 258ndash291
Saleh SD and Wang CK (1993) The managementof innovation ndash strategy structure and organiza-tional climate IEEE Transactions on EngineeringManagement 40 14ndash21
Schmidt RL and Freeland JR (1992) Recentprogress in modelling RampD project-selection proc-esses IEEE Transactions on Engineering Manage-ment 39 189ndash201
Schroeder RG Van de Ven AH Scudder GDand Polley D (1989) The development of innova-tion ideas In Van de Ven AH Angle HL andPoole M (eds) Research on the Management ofInnovation The Minnesota Studies New YorkHarper amp Row pp 107ndash133
Scott S and Bruce R (1994) Determinants ofinnovative behaviour a path model of individualinnovation Academy of Management Journal 37580ndash607
Shane S Venkataraman S and MacMillan I (1995)Cultural differences in innovation championingstrategies Journal of Management 21 931ndash952
Shepard HA (1967) Innovation-resisting and inno-vation producing organizations Journal of Busi-ness 40 470ndash477
Shin J and McClomb GE (1998) Top executiveleadership and organizational innovation an
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Innovation management measurement A review
empirical investigation of nonprofit human serviceorganizations (HSOS) Administration in SocialWork 22 1ndash21
Single AW and Spurgeon WM (1996) Creatingand commercializing innovation inside a skunkworks Research-Technology Management 39 38ndash41
Song XM and Parry ME (1996) What separatesJapanese new product winners from losersJournal of Product Innovation Management 13422ndash439
Souitaris V (2002) Firm-specific competenciesdetermining technological innovation a survey inGreece RampD Management 32 61ndash77
Stock GN Greis NP and Fischer WA (2001)Absorptive capacity and new product developmentJournal of High Technology ManagementResearch 12 77ndash91
Sundbo J (1997) Management of innovation inservices Service Industries Journal 17 432ndash455
Sveiby KE (1997) The New Organizational WealthManaging and Measuring Knowledge-BasedAssets San Francisco CA Berrett-Koehler
Szakonyi R (1994) Measuring RampD effectiveness IResearch-Technology Management 37 27ndash32
Thompson L (2003) Improving the creativity oforganizational work groups Academy of Manage-ment Executive 17 96ndash109
Tidd J Bessant J and Pavitt K (1997) ManagingInnovation Integrating Technological Market andOrganizational Change Chichester UK JohnWiley
Tipping J and Zeffren E (1995) Assessing thevalue of your technology ResearchndashTechnologyManagement 38 22ndash40
Trajtenberg M (1990) A penny for your quotes ndashpatent citations and the value of innovations RandJournal of Economics 21 172ndash187
Tranfield D Denyer D and Smart P (2003)Towards a methodology for developing evidence-informed management knowledge by means of asystematic review British Journal of Management14 207ndash222
Tsai W (2001) Knowledge transfer in intraorganiza-tional networks effects of network position andabsorptive capacity on business unit innovation andperformance Academy of Management Journal44 996ndash1004
Van Den Bulte C (2000) New product diffusionacceleration measurement and analysis MarketingScience 19 366ndash380
Verhaeghe A and Kfir R (2002) Managing innovationin a knowledge intensive technology organisation(KITO) RampD Management 32 409ndash417
Verworn B (2002) The fuzzy front end of productdevelopment an exploratory study In Proceedings9th International Product Development ManagementConference Sophia Antipolis France pp 863ndash878Brussels European Institute for Advanced Studiesin Management
Veryzer RW (1998) Discontinuous innovation andthe new product development process Journal ofProduct Innovation Management 15 304ndash321
Volberda HW (1996) Towards the flexible formhow to remain vital in hypercompetitive environ-ments Organizational Science 7 359ndash374
Von Hippel E (1986) Lead users a source of novelproduct concepts Management Science 32 791ndash805
Von Zedtwitz M (2002) Organizational learningthrough post-project reviews in RampD RampD Man-agement 32 255ndash268
Voss C Chase R and Roth A (1999) Internationalservice study Decision Line May 4ndash7
Vyakarnam S and Adams RJ (2001) Institutionalbarriers to enterprise support an empirical studyEnvironment and Planning C Government andPolicy 19 335ndash353
Werner BM and Souder WE (1997) MeasuringRampD performance ndash state of the art Research-Technology Management 40 34ndash42
West MA (1990) The social psychology of innova-tion in groups In West MA and Farr JL (eds)Innovation and Creativity at Work Psychologicaland Organizational Strategies Chichester UKJohn Wiley pp 309ndash333
West MA and Anderson NR (1996) Innovation intop management teams Journal of Applied Psychol-ogy 81 680ndash693
White A (2002) Enabling factors in the front end ofthe innovation process In Proceedings 9thInternational Product Development ManagementConference Sophia Antipolis France BrusselsEuropean Institute for Advanced Studies inManagement pp 879ndash887
Wolfe RA (1994) Organizational innovationreview critique and suggested research direc-tions Journal of Management Studies 31 405ndash431
Yoon E and Lilien GL (1985) A new productlaunch-time decision model Journal of ProductInnovation Management 3 134ndash144
Zahra SA and George G (2002) Absorptivecapacity a review reconceptualization and
copy Blackwell Publishing Ltd 2006 47
March 2006
extension Academy of Management Review 27185
Zaltman G Duncan R and Holbek J (1973) Inno-vations and Organizations New York John Wiley
Zien KA and Buckler SA (1997) From experiencedreams to market crafting a culture of innovationJournal of Product Innovation Management 14274ndash287
Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
copy Blackwell Publishing Ltd 2006 31
March 2006
of the input measures (such as level of RampDexpenditure) that we have already discussedIt is argued that it is not their absolute magni-tude but their magnitude relative to industryrivals that is significant As has been notedalthough these may be useful indicators ofcommitment or intent they could mask pro-cess inefficiencies However OrsquoBrienrsquos (2003)observation that an interaction betweenintended strategy and slack will influence per-formance suggests that process inefficienciesare less likely to occur where an innovationstrategy is not merely nominally adopted butis embedded in the culture behaviours andactions of the organization
In Li and Atuahene-Gimarsquos (2001) termsthe evidence for an embedded innovationstrategy is subjective and may include evalua-tions of an organizationrsquos emphasis on NPDsuch as resource allocation Saleh and Wang(1993) describe this as consisting of threemain components risk-taking proactivenessand persistent commitment to innovationThese include top management responsibilityfor innovation within the organization includ-ing specifying and communicating a directionfor innovation Cooper (1984) demonstratedthat new product performance is largelydecided by the strategy that top managementadopts The key components are the linkbetween innovation strategy and overall busi-ness goals (strategic orientation) and theprovision of leadership to make innovationhappen via a strong vision (Pinto and Prescott1988) for innovation a long-term commit-ment to innovation and a clear allocation ofresources (Cooper et al 2004) This distinc-tion between strategic planning or orientationand strategic vision or leadership is frequentlyreplicated in the literature
Two distinct types of strategic orientationmeasures can be identified in the literatureFirst those that measure whether the organi-zation has an innovation strategy this can beevaluated in several ways such as commit-ment to differentiated funding (White 2002)explicit expression (does the organizationhave an innovation strategy) (Miller and
Friesen 1982) and identifiable roles for newproducts and services (Cooper and Klein-schmidt 1990 Geisler 1995 Hauser andZettelmeyer 1997 Tipping and Zeffren 1995)The second type of measure regards strategyas a dynamic instrument that shapes andguides innovation in the organization Thesemeasures assume that strategy exists and asksquestions about how effective it is in shapingand guiding lsquoare structures and systemsalignedrsquo (Bessant 2003) lsquodo innovation goalsmatch strategic objectivesrsquo (Tipping andZeffren 1995) and further similar measures ofstrategic fit (Bessant 2003)
From a strategic leadership perspectiveDougherty and Cohen (1995) found thebehaviour of senior managers to be influentialThose chief executives most likely to makeinnovation happen are those with a clearvision of the future operation and direction oforganizational change and creativity (Shin andMcClomb 1998) Senior management areresponsible for developing and communicat-ing a vision for innovation being supportiveand adopting an attitude tolerant to changeand championing the notion of innovationwithin the organization Managerial toleranceto change creates the right climate for theimplementation stage of innovation whereconflict resolution might be necessary(Damanpour 1991)
Managerial attitude is also reflected innorms or support for innovation These are theexpectation approval and practical support ofattempts to introduce new and improved waysof doing things in the work environmentMeasures are mostly qualitative in nature andexplore perceptions mostly about the extentto which respondents recognize factors to bepresent (or absent)
Relatively few measures of championingand leadership have been uncovered in thisreview other than those that simply ask thequestion whether or not one or other existsperhaps through evidence of signs of commit-ment in annual reports (Chiesa et al 1996) orlevels of concern of top management (Coughlanet al 1994) or whether or not an individual
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Innovation management measurement A review
has been physically assigned to a particularrole (Souitaris 2002) Shane et al (1995) pro-vide a series of reflective questions designedto allow organizations to determine for them-selves their expectations and understandingof the role of champion For example lsquoto whatextent should the organization make it possiblefor the people working on an innovation tobend the rules of the organization to developthe innovation or be allowed to bypass certainpersonnel procedures to get people committedto an innovationrsquo
It must be emphasized that the dominantperspective on strategy in the literature isone that examines the relationship betweenstrategy and performance However a smallnumber of studies have examined the natureof the transitions of these states as organiza-tions adopt and embed an innovation strategyThis sub-section of the literature is under-pinned by the assumption that firms that fol-low innovation strategies differ from otherfirms in several respects It is apparent thatmore innovative firms adopt different opera-tional strategies to accommodate flexibilityand quality capabilities (Alegre-Vidal et al2004) have different capital managementpractices to facilitate slack resources (OrsquoBrien2003) are more tolerant of internal conflict insupport of creativity (Dyer and Song 1998)and maintain organizational structures that arein the lsquointermediate zone between order anddisorderrsquo (Brown and Eisenhardt 1997 22)What is clear from this literature is that anytransition towards an innovation strategy willnecessarily take several years because of theresources and energy that are necessary beforesuch a transformation can even be triggered(Hope Hailey 2001)
Organizational Culture and Structure
Burns and Stalker (1961) described a contin-gency approach to innovation managementlater developed to include concepts of func-tional differentiation specialization and inte-gration (Lawrence and Lorsch 1967) whichsuggests that environmental change prompts a
realignment of the fit between strategy andstructure That is to perform effectively anorganization must be appropriately differenti-ated specialized and integrated Pugh et al(1969) argued that the structure of an organi-zation is strongly related to the context withinwhich it functions Our closing discussion inthe previous section that the characteristics oforganizations following an innovation-focusedstrategy will differ from those that do not isconsistent with this contingency approach andin the following we focus on those dimen-sions of culture and structure that have beenidentified to differentiate between innovativeand non-innovative organizations
Organizational culture and structure concernthe way staff are grouped and the organiza-tional culture within which they work Therehas been considerable work on the situationaland psychological factors supportive of inno-vation in organizations Indeed it has beenwidely demonstrated that the perceived workenvironment (comprising both structural andcultural elements) does make a difference tothe level of innovation in organizations (Ama-bile et al 1996 Ekvall 1996) Creative andinnovative behaviours appear to be promotedby work environment factors (Mathisen andEinarsen 2004) Indeed it is clear that organ-izations can create environments in whichinnovation can be encouraged or hampered(Dougherty and Cohen 1995 Tidd et al1997) A common theme is that of the poly-chronic organization ndash one with the capacityto be in two states at once (Becker andWhisler 1973) Shepard (1967) describes thisas a two-state organization manoeuvreingbetween loose and tight and Mitroff (1987)as business-as-usual versus business-not-as-usual More prosaically this means organiza-tions need to be able for example to providesufficient freedom to allow for the explorationof creative possibilities but sufficient controlto manage innovation in an effective and effi-cient fashion
Ernst (2002) specifies a range of genericcharacteristics for the dedicated project groupassigned the innovation task multidisciplinarity
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March 2006
dedicated project leader inter-functional com-munication and co-operation qualificationsand know-how of the project leader teamautonomy and responsibility for the processAnd these factors are echoed throughout theliterature Rothwell (1992) refers to them aslsquocorporate conditionsrsquo Chiesa et al (1996)lsquoenabling processesrsquo and OrsquoReilly and Tushman(1997) lsquonorms for innovation and changersquoHowever despite their perceived importancethere is little guidance on how to measurethem
Volberda (1996) developed a conceptualmodel of alternative flexible organizationalforms that are argued to initiate or respondbetter to different types of competition Yet inspite of its importance there is relatively littleevidence of extant measures of flexibility inthe literature Rothwell (1992) and Ekvall(1996) propose a range of foci for measures oforganizational and production flexibility suchas lsquocorporate flexibility and responsiveness tochangersquo Coughlan (1994) considers the flexi-bility of resource allocation Several measuresof personnel flexibility are evident such aslsquothe adaptiveness of RampD personnel to tech-nology changesrsquo (Lee et al 1996) and lsquothewillingness to try new procedures and toexperiment with change so as to improve asituation or a processrsquo (Abbey and Dickson1983) At the level of the firm Liao et al(2003) introduce a similar construct ndash lsquoorgan-izational responsivenessrsquo
Organizational complexity the amount ofspecialization and task differentiation report-edly have a positive relationship (Damanpour1996) though Wolfe (1994) argues that it mayfavour initiation at the expense of implemen-tation Administrative intensity that is theratio of managers to total employees favoursadministrative innovation (Damanpour 19911996) but possibly at the cost of other pro-duct or technological innovations (Doughertyand Hardy 1996) Centralization the concen-tration of decision-making authority at the topof the organizational hierarchy and formaliza-tion the degree of emphasis on following rulesand procedures in role performance have both
been shown to have a negative impact on organ-izational innovation (Burns and Stalker 1961Damanpour 1991) Indeed rigidity in rulesand procedures may prohibit organizationaldecision-makers from seeking new sources ofinformation (Vyakarnam and Adams 2001)
Underlying the concept of the workplaceenvironment are issues related to the manage-ment of human resources and the creation ofa culture or climate in which individuals per-ceive innovation to be a desired and supportedorganizational objective There has been con-siderable empirical work on organizationalclimates supportive of the innovation processand several measurement instruments havebeen developed which Mathisen and Einarsen(2004) review The Team Climate Inventory(TCI) (Anderson and West 1996 1998) andthe KEYS instrument for assessing the workenvironment for creativity (Amabile et al 1996)have been found to be robust and rigorous
The TCI has been applied and validated inseveral studies (Agrell and Gustafson 1994Anderson and West 1998 Kivimaumlki et al1997 West and Anderson 1996) Replicationstudies using the TCI have found it canexplain a large part of the variance in teamsrsquoinnovative performance (Agrell and Gustafson1994) The TCI is based around four mainfactors participative safety (how participativeis the team in decision-making proceduresand how psychologically secure do teammembers feel about proposing new andimproved ways of doing things) support forinnovation (the degree of practical support forinnovation attempts contrasted with the rheto-ric of professed support by senior manage-ment) vision (how clearly defined sharedattainable and valued are the teamrsquos objectivesand vision) and task orientation (the com-mitment of the team to achieve the highestpossible standards of task performance includ-ing the use of constructive progress monitor-ing procedures) (Anderson and West 1996)Kivimaumlki et al (1997) suggested a fifth factorlsquointeraction frequencyrsquo relating to the regularityof contact and communication within theproject team
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Innovation management measurement A review
There is general agreement about theimportance of individual and group autonomyin the innovation process (Amabile 1998)Zien and Buckler (1997) emphasize the needfor freedom to experiment and the creation ofsafe havens without which innovation out-come might be constrained Measures ofautonomy mix both qualitative and quantita-tive approaches For example lsquothe degree offreedom personnel have in day-to-day operat-ing decisions such as when to work andhow to solve job problems including freedomfrom constant evaluation and close supervi-sionrsquo (Abbey and Dickson 1983) or lsquopercent-age of RampD portfolio with explicit businessunit andor corporate business managementsign-offrsquo (Tipping and Zeffren 1995) Addition-ally several authors have proposed generalmeasures of autonomy such as lsquofreedom tomake operating decisionsrsquo (Abbey and Dick-son 1983) or lsquodegree of empowermentrsquo (deLeede et al 1999 Tipping and Zeffren1995)
Morale and motivation are dimensions ofthe innovative organization that can be meas-ured as they pertain to individuals ndash lsquotheextent to which personnel are well rewardedrsquo(Abbey and Dickson 1983) to groups ndash lsquoourreward system is more group-based thanindividual-basedrsquo (Parthasarthy and Hammond2002) and to the organization as a whole ndashlsquothe degree to which the organization attemptsto excelrsquo (Abbey and Dickson 1983) Aspectsof morale and motivation that have beenmeasured include trust (Miller and Friesen1982) and job satisfaction which has beenmeasured by Keller (1986) on a 20-item scale
Organizational culture may include a sharedvision and it has been argued that the clearerthe vision the more effective it is as a facilitatorof innovation as it enables focused develop-ment of new ideas that can be assessed moreprecisely (West 1990) Pinto and Prescott(1988) found that the only factor to have pre-dictive power in terms of potential for successat all stages of the innovation process (con-ception planning execution and termination)was having a clearly stated missionvision
while West (1990) contends that the quality ofinnovation is partly a function of visionKeller (1986) adopts Kirtonrsquos (1976) 32-itemadopterndashinnovator inventory to determineindividual and team orientation to innovationVision is operationalized in the team climateinventory (cf Agrell and Gustafson 1994Anderson and West 1996 1998 West andAnderson 1996) and is deconstructed into aseries of sub-dimensions such as clarity shared-ness attainability and value with regard toteam objectives
Another aspect of culture is the propensityto take risks Saleh and Wang (1993) describethis as a willingness to confront risky oppor-tunities and tolerate failure and learn fromdoing so rather than recklessly gamblingSimilarly West (1990) demonstrated thathigher levels of participative safety facilitateinnovation Participative safety is non-judgmental supportive and characterized bysocio-emotional cohesiveness The attractive-ness of the organization as a place to workand undertake innovative activities is used byGeisler (1995) as an indicator of the climatefor innovation measured by numbers of can-didates applying for positions and the ageprofile of scientists and engineers Keller(1986) offers a slightly different perspectiveon participative safety with the constructlsquogroup cohesivenessrsquo which he operational-izes using an established five-item measure
This review has described a wide variety ofmeasures proposed for organizational cultureand structure Unlike some other aspects ofinnovation management this area has receivedextensive measurement attention HoweverHolbek (1988) argues that innovating organi-zations must adopt contrasting structures andclimates as they move from the initiation tothe implementation stages of innovationChesborough and Teece (1996) and Burns andStalker (1961) argue that there is a relation-ship between organizational design and typeof innovation It is a significant gap in innova-tion measurement that there appears to be nomeasures that adequately capture or articulatethis sense of structural shift
copy Blackwell Publishing Ltd 2006 35
March 2006
Portfolio Management
The importance of portfolio management tosuccessful product innovation has recentlyemerged as a key theme in the literature Itis important because of the rapidity at whichresources are consumed in the innovationprocess and the need for these to be managed(Cebon and Newton 1999) The effectivenesswith which an organization manages its RampDportfolio is often a key determinant of itscompetitive advantage (Bard et al 1988) Thefocus of portfolio management is on makingstrategic technological and resource choicesthat govern project selection and the futureshape of the organization (Cooper et al 1999)The problems of allocation of resources evalu-ation selection and termination of projects inachieving the optimal portfolio have beenextensively investigated The models all havethe objective of devising means to allocateresources to projects to obtain the optimalbalance in the product development portfoliothat is arriving at a portfolio that optimizesthe trade-off between returns and risks
The process of selecting innovation projectsrequires evaluation and resource allocationunder uncertain conditions It is argued that asystematic process guided by clear selectioncriteria can help optimize the use of limitedresources and enhance an organizationrsquoscompetitive position (Hall and Nauda 1990)The earliest models used return on investmentas the primary decision criteria (Bard et al 1988)Following this increasingly sophisticatedmathematical tools were developed to resolvewhat Schmidt and Freeland (1992) describe asthe constrained optimization problem that isto maximize the output (according to specifiedcriteria) from a subset of available inputsThese project selection models lsquohave beenvirtually ignored by industryrsquo (Schmidt andFreeland 1992 190) Part of the reason forthis is the inherent complexity of some ofthese models but also that they fail to takeinto account organizational decision andcommunication processes More recentlymodels have tried to take account of these
more qualitative factors involved in decisionprocesses
Scoring models require respondents tospecify the merit of any project proposalaccording to a set of a priori criteria whichmay be objective or subjective (Hall andNauda 1990) Economic and benefit modelsattempt to compute the cost benefit or finan-cial risk of pursuing a specific project whilemathematical programming approaches seekto optimize some objective function(s) subjectto specified resource constraints Algorithmsof varying complexity exist requiring moni-toring and significant data entry and whilemany are conceptually attractive surveys donot show widespread utilization of thesetechniques (Hall and Nauda 1990) Theseapproaches are all based on financial meas-ures such as internal rate of return net presentvalue and return on investment At the otherend of the spectrum qualitative approachessuch as peer review and mental checklistsrely on subjective perceptions and measuresof portfolio balance (Cooper et al 2001Henriksen and Traynor 1999)
Cooper et al (1999) find that best performersuse explicit formalized tools and consist-ently apply them to all projects considered tobelong to a portfolio A series of measures canbe identified that evaluate the whole portfolioof innovation projects to answer questionssuch as lsquois it balanced in terms of quantity ofshort- and long term-projectsrsquo and lsquois there abalance between high and low risk projectsand large and small projectsrsquo (Brenner 1994Cooper et al 2001) Another set seeks to iden-tify the extent to which portfolio evaluationmeasures are formalized within the organiza-tionrsquos processes (Cebon and Newton 1999Chiesa et al 1996 Farrukh et al 2000 Millerand Friesen 1982) Yet another approach is toview project evaluation and selection as anorganizational capability and attempt to deter-mine a level of proficiency (Szakonyi 1994)Finally there is a series of post hoc measuresof the appropriateness of project selections inthe light of results and alignment with busi-ness objectives (Lee et al 1996)
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Innovation management measurement A review
Project Management
Project management is concerned with theprocesses that turn the inputs into a marketa-ble innovation The innovation process iscomplex comprising a myriad of events andactivities some of which can be identified as asequence and some of which occur concur-rently and it is clearly possible that innova-tion processes will differ to some degreeacross organizations and even within organi-zations on a project-by-project basis Havingan efficient process that is able to manage theambiguity of the innovation is universally agreedto be critical to innovation (Globe et al 1973)
Various approaches have been taken tomodelling innovation processes as a series ofevents (Zaltman et al 1973) as a social interac-tion (Voss et al 1999) as a series of transactions(Nelson and Winter 1982) and as a process ofcommunication (Farrukh et al 2000) The his-tory of project management research is partlycharacterized by a debate regarding the extentto which events and activities within the processoccur in linearly sequential discrete identifiablestages (Zaltman et al 1973) or whether eventsare more disorganized (King 1992) or evenchaotic (Koput 1997) However despite thesedifferent viewpoints there are a number ofcommon elements that can be summarized asthe major components of the innovation projectmanagement These are project efficiencytools communications and collaboration
Several studies make efforts to measureproject management efficiency mostly in theform of comparisons between budget and actual(project costs project duration revenue fore-casting) Another measure of project manage-ment success is speed Innovation speed hasbeen positively correlated with product qual-ity or the degree to which it satisfies customerrequirements measures include speed (Hauserand Zettelmeyer 1997) performance againstschedule (Chiesa and Masella 1994) and dura-tion of the process (Cebon and Newton 1999)
To achieve efficiency it is widely recom-mended that organizations seeking to innovateshould establish formal processes for innovat-
ing and make use of tools and techniquesthat may facilitate innovative endeavours Thestage-gate process (Cooper 1990) is possiblythe most familiar of these but other method-ologies for innovation project managementexist including Phased Development Productand Cycle-time Excellence and Total Design(see Jenkins et al (1997) for a discussion)These methodologies have in common theseparation of the product development processinto structured and discrete stages which eachhave milestones in the form of quality controlcheckpoints at which stopgo decisions are madewith regard to the progress of the project Thesehighly structured approaches to the manage-ment of the innovation process began toemerge in the 1990s (Veryzer 1998) The useof structured tools and processes can bemeasured by project process evaluations forexample the use of a formal problem-findingproblem-solving cycle (Bessant 2003) the useof formal post-launch evaluation procedures(Atuahene-Gima 1995) or the use of certifiedprocesses (Chiesa et al 1996) These rathergeneral process measures have been supple-mented by measures of the use of specificinstruments and tools such as interactiveCAD or CAM (Maylor 2001) or the use ofcomputer-integrated manufacturing processes(Parthasarthy and Hammond 2002) but wenote that these measures betray the technologicaland NPD heritage that underpins many of theinnovation measures identified in this reviewEquivalents for service industry public ornot-for-profit sector innovations are somewhatlacking in the literature and constitute aresearch gap
Communications are important in projectmanagement Damanpour (1991) demon-strated the existence of a positive relationshipbetween internal communication and innova-tion Internal communication facilitates thedispersion of ideas within an organizationincreases the diversity and also contributes tothe team lsquoclimatersquo Communication can bemeasured by various integration mechanismseg committees numbers of meetings andcontacts (Damanpour 1991) There are also
copy Blackwell Publishing Ltd 2006 37
March 2006
measures of external communications whichtend to focus on whether communication istaking place the level at which it occurs andwith whom (Cebon and Newton 1999 Leeet al 1996 Rothwell 1992 Souitaris 2002)These measures of internal and external com-munication in the literature are based on bothsubjective evaluations and objective frequencycounts Subjective measures include lsquowe alwaysconsult supplierscustomers on new productideasrsquo (Parthasarthy and Hammond 2002) andlsquodegree of organization members involved andparticipating in extra-organizational professionalactivitiesrsquo (Damanpour 1991) Objective countsinclude (Damanpour 1991) lsquoextent of commu-nication amongst organizational units or groupsmeasured by various integrating mechanismssuch as numbers of committees and frequencyof meetingsrsquo (Anderson and West 1998)lsquofrequency of formal meetings concerningnew ideasrsquo (Souitaris 2002 Szakonyi 1994)lsquohow well do the technical and finance peoplecommunicate with one anotherrsquo
It is widely recognized that collaboratingwith suppliers (Bessant 2003) and customers(von Hippel 1986) can also make a significantcontribution to the innovation processMeasures of collaborative working includethe use of guest engineers (Maylor 2001) thepercentage of projects in co-operation withthird parties (Kerssens-van Drongelen andBilderbeek 1999) and the extent to whichdecision-making at top levels is characterizedby cross-functional discussions (Miller andFriesen 1982) In addition Jassawalla andSashittal (1999) identify some characteristicsof internal collaboration ie that teams arecharacterized by their mindfulness levels ofat-stakeness synergy and transparency butthey do not suggest how these aspects mightbe measured which constitutes a furtherresearch gap
Commercialization
Commercialization can be considered to bethe second of the two phases in Zaltman et alrsquos(1973) conceptualization of the innovation
process that is lsquoimplementationrsquo This canmean taking an innovation to market (Chakra-vorti 2004) but may also include convincingproduction managers to adopt a series of newtechniques available to them (Single andSpurgeon 1996) Indeed the successful intro-duction of new products and services intomarkets is important for the survival andgrowth of organizations Kelm et al (1995)regard commercialization as a transitionalphase in which the organization becomesless reliant on its technological capabilities(important during the activities of initiation)but more dependent on market dynamicsCommercialization is concerned with makingthe innovative process or product a commer-cial success it includes issues such as market-ing sales distribution and joint venturesWhile technical capabilities are important forthe early stages of the innovation process anddevelopment activities for the launch andimplementation stage it is marketing capabili-ties (market investigation market testingpromotion etc) that are significant (Calantoneand di Benedetto 1988 Globe et al 1973)Verhaeghe and Kfir (2002) consider aspectsof commercialization under the headings ofmarket analysis and monitoring reaching thecustomer and market planning
Firm-level measures of the launch or com-mercialization process appear to be relativelythin In their description of the RampD processBalachandra and Brockhoff (1995) character-ize the commercialization stage as requiringlsquobig bucksrsquo market reviews and organiza-tional commitment Most measures appear tobe not much more sophisticated than thisMeasures are frequently restricted to numbersof products launched in a given period (egYoon and Lilien 1985) There is thoughsome focus on market analysis and monitor-ing (Verhaeghe and Kfir 2002) Song andParry (1996) employ a set of measures oflaunch proficiency (salesforce distributionaland promotional support) that directly addressthe lsquoadequacyrsquo of the organizationrsquos facilities inthese areas as do Avlonitis et al (2001) Andthere is a limited mention of the commercial
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Innovation management measurement A review
intentions of an organizationrsquos competitors(Calantone and di Benedetto 1988) Thethemes of proficiency of personnel in this area(eg Atuahene-Gima 1995 Cebon and New-ton 1999) of adherence to a commercializa-tion schedule (eg Griffin and Page 1993) andof formal post-launch reviews (Atuahene-Gima 1995 von Zedtwitz 2002) can also befound in the literature
Even in the work that addresses post-project reviews very little attention is directedtowards measuring innovation launch orcommercialization However this comes aslittle surprise as Hultink et al (2000) recentlyobserved that little work has been done in thearea perhaps because at least in the innova-tion literature launch activities appear to beconsidered the domain of other specialistsparticularly marketers and the process is seenas separate from innovation In their studythey investigated launch decisions associatedwith success for consumer and business-to-business products Much of the literature thatconsiders launch and commercialization doesso from the viewpoint of the adopter andassesses rates of adoption and diffusion ofinnovations over time across populations(Kessler and Chakrabarti 1996 Van DenBulte 2000)
The area of commercialization appears tobe the least developed of the issues involvedin innovation management This is a huge gapbecause without this last step the previoussteps of assembling inputs project manage-ment etc will not result in a commerciallyviable outcome for the firm We believe thatthis area of innovation is in urgent need offurther development from both theory andmeasurement viewpoints
Discussion
Innovation management measurement is acritical discipline for both academics andpractitioners The capacity of organizations toinnovate is determined by multiple factors thatrelate both to their own internal organizationand to their market environment (Rothwell
et al 1974) and the task of generating andthen converting ideas into usable and market-able products requires high levels of inter-functional co-ordination and integration Thispaper opened with the general observationthat innovation measurement does not appearto take place routinely within managementpractice and that where it does it tends tofocus on output measures Further from therelatively small number of empirical studiesof measurement in practice measurement ofinnovation management appears to be under-taken infrequently in an ad hoc fashion andrelies on dated unbalanced or under-specifiedmodels of the innovation management phe-nomenon This suggests that a large part ofthe contemporary conceptualization of theinnovation management phenomenon is over-looked in practitionersrsquo measurement prac-tices and consequently that opportunities forthe more efficient and effective managementof the innovation process are not realizedSome possible reasons for this state of affairsare failure of academics to communicate ade-quately inconsistency inaccessibility andcomplexity of measures and poor synthesisand packaging
Following a review and synthesis of theliterature we proposed a seven-dimensionalconceptualization of the innovation manage-ment phenomenon and applied it to an exam-ination of the measurement problem Throughthe application of this framework to their ownparticular context it is suggested that practi-tioners will be able to conduct an evaluationof their own innovation management activityidentify gaps weaknesses or deficiencies andalso improvement potential Further it ishoped that organizations applying the frame-work will be able to tease out areas whereinnovation is only nominally adopted in theirprocesses and identify areas where attentionand resources might be focused
From the perspective of its management itis no longer sufficient to treat innovation as alinear process where resources are channelledat one end from which emerges a new prod-uct or process The measurement framework
copy Blackwell Publishing Ltd 2006 39
March 2006
presented in Table 2 shows the breadth andvariety of elements of innovation managementthat ideally need to be measured There havebeen several studies that have investigated thelimitations of various approaches to measure-ment (eg Werner and Souder 1997) and ofspecific measures (eg Trajtenberg 1990) asthey relate to the practice of innovation Thechoice of an appropriate RampD measurementmetric depends on the userrsquos needs in terms ofcomprehensiveness of measurement type ofRampD being measured available data andamount of effort the user can afford to allocateto the exercise Nonetheless the commonciting across various papers of the measuresnoted in the innovation management frame-work presented here suggests that a base setof innovation management measures isimplicitly present in the literature eventhough they may be fragmented in appearanceand presentation By pulling together theinnovation management framework fromdiverse sources this paper aims to bring suchissues into the open and identify relevantresearch gaps Table 2 can be viewed as thebasis for a balanced scorecard (Kaplan andNorton 1992) for innovation managementthat is as a balanced set of areas that need tobe measured in order to gain insight into anorganizationrsquos holistic ability to manage inno-vation Such multidimensional approaches tomeasurement have been found in other areasof management to be an improvement on sim-ple one-dimensional measures and to be ableto capture both short- and long-term aspectsof value creation in the firm (Phelps 2004)
We have identified a large number of meas-ures and approaches in a variety of innovationmanagement areas and we have constructed ageneric set of innovation management meas-urement areas to act as a framework for bal-anced measurement However in several ofthese areas measurement gaps have beenidentified These gaps are of two types valid-ity gaps and omission gaps Validity gaps arisewhere there is insufficient evidence that pro-posed measures actually do capture drivers oroutputs of innovation management for example
we have noted the objections to counts ofpatents or increasing expenditure on RampD beingused as measures of innovative organizationsSimilarly there is an absence of evidence thatthe large number of subjective perceptions ofinnovation management practices proposed(lsquowe do Arsquo lsquowe are good at Brsquo) actually relateto innovation management performance
Omission gaps occur where the importanceof an aspect of innovation management is sup-ported in the literature but measures for thisaspect are lacking Omission gaps are particu-larly prevalent in the elements of innovationmanagement such as knowledge managementinnovation strategy and commercializationthat do not feature strongly in the literature ontechnological and manufacturing-based inno-vation Another area traditionally not givenmuch emphasis in this literature is organiza-tion and culture which fortunately is bettertreated by the organizational behaviour litera-ture where a number of measures have beendeveloped Much of the current state of meas-urement practice can be traced back to the dis-ciplinersquos early manufacturing RampD and NPDfocus While product innovation is undoubt-edly important it is only one dimension of anorganizationrsquos innovation agenda Process andorganizational innovations are recognizedtoo as critical for competitiveness yet theseperspectives are inadequately represented inmeasurement terms
General areas of omission in this fieldrelate to an over-reliance on financial meas-ures rather than process measures for exam-ple the use of financial measures of portfoliooptimization but an absence of portfoliocapability measures a similar reliance oncodified knowledge such as patents to theexclusion of more intangible measures suchas tacit knowledge the measurement of levelsof resources or activities with no indication ofwhat an optimal level would be the measure-ment of drivers of innovation without meas-ures of whether these drivers are aligned witheach other and with firm strategy measures ofpresence that do not measure quality (eg theuse of dichotomous (yesno) measures that do
40 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
not indicate how well an action is implementedand measures of the presence of leadership(such as champions) but not of quality ofleadership) a general absence of measuresfor important properties of organizationalstructures such as flexibility and a lack ofmeasures of the match between structure andenvironment a technological and NPD bias toproject management measures and a relativeabsence of measures for service sectors apaucity of measures for internal communica-tions and a general lack of measures forcommercialization management ndash in particulararound marketing and sales capabilities forinnovative products and services All thesegaps provide the potential for further researchin innovation management measurement
The absence of an accepted framework ofinnovation management measures leads notonly to the gaps identified above but also toother problems in the literature One is that itis frequently unclear whether or not the met-rics used are of the researchersrsquo own devisingdrawn from the literature or are what are usedby the organizations being studied Nor is italways clear when metrics are devised orrecommended whether they are intended foruse in a research capacity or for managementtasks Further the measures proposed in theliterature often seem to be proposed abstractlywith little consideration given to the use ofmeasures as a management tool in the day-to-day context of managing innovation In theabsence of a comprehensive framework forinnovation management measurement organ-izations will inevitably resort to ad hoc andpartial metrics which can encourage wastefulpractice (eg measuring innovation managementcapability according to annual RampD spend)We hope that the framework constructed inthis paper will be useful in the constructionof comprehensive measures of innovationmanagement
Acknowledgements
The research reported here was supported bya grant from Cranfield School of Management
the authors gratefully acknowledge this supportFurther the authors are grateful to the editorsand two anonymous reviewers for their helpfuland insightful comments on previous versionsof this paper
Note
1 Corresponding author Telephone +44 (0) 207594 9137 e-mail radamsimperialacuk
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Alegre-Vidal J Lapiedra-Alcami R and Chiva-Gomez R (2004) Linking operations strategy andproduct innovation an empirical study of Spanishceramic tile producers Research Policy 33 829ndash839
Amabile TM (1998) How to kill creativity HarvardBusiness Review SeptemberndashOctober 77ndash87
Amabile TM Conti R Coon H Lazenby J andHerron M (1996) Assessing the work environ-ment for creativity Academy of Management Jour-nal 39 1154ndash1184
Ambrosini V and Bowman C (2001) Tacit know-ledge some suggestions for operationalisationJournal of Management Studies 38 811ndash829
Anderson N and West MA (1996) The teamclimate inventory development of the TCI and itsapplications in teambuilding for innovativenessEuropean Journal of Work and Organizational Psy-chology 5 53ndash66
Anderson NR and West MA (1998) Measuringclimate for work group innovation developmentand validation of the team climate inventory Jour-nal of Organizational Behavior 19 235ndash258
Atuahene-Gima K (1995) An exploratory analysisof the input of market orientation on new productperformance a contingency approach Journal ofProduct Innovation Management 12 275ndash293
Avlonitis GJ Papastathopoulou PG and Gounaris SP(2001) An empirically-based typology of productinnovativeness for new financial services success
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March 2006
and failure scenarios Journal of Product Innova-tion Management 18 324ndash342
Balachandra R and Brockhoff K (1995) Are RampDproject termination factors universal Research-Technology Management 38 31ndash36
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Barclay I (1992) The new product developmentprocess part 2 Improving the process of new prod-uct development RampD Management 4 307ndash317
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Bess G (1998) A first stage organization life cyclestudy of six emerging nonprofit organizations inLos Angeles Administration in Social Work 2235ndash52
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Bessant J and Francis D (1997) Implementing thenew product development process Technovation17 189ndash197
Blackler F (1995) Knowledge knowledge work andorganizations an overview and interpretationOrganization Studies 16 1021ndash1046
Bougrain F and Haudeville B (2002) Innovationcollaboration and SMEs internal research capaci-ties Research Policy 31 735ndash747
Brenner MS (1994) Practical RampD project prioriti-zation Research Technology Management 37 38ndash43
Brown MG and Svenson RA (1988) MeasuringRampD productivity Research-Technology Manage-ment JulyndashAugust 11ndash15
Brown SL and Eisenhardt KM (1997) The art ofcontinuous change linking complexity theory andtime-paced evolution in relentlessly shifting organiza-tions Administrative Science Quarterly 42 1ndash34
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Burns TR and Stalker GM (1961) The Manage-ment of Innovation London Tavistock
Calantone RJ and di Benedetto CA (1988) Anintegrative model of the new product developmentprocess an empirical validation Journal of Prod-uct Innovation Management 5 201ndash215
Cebon P and Newton P (1999) Innovation in firmstowards a framework for indicator developmentMelbourne Business School Working Paper 99-9
Chakravorti B (2004) The new rules for bringinginnovations to market Harvard Business Review82 58ndash67
Chen C-J (2004) The effects of knowledgeattribute alliance characteristics and absorptivecapacity on knowledge transfer performance RampDManagement 34 311ndash321
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Chiesa V Coughlan P and Voss A (1996) Devel-opment of a technical innovation audit Journal ofProduct Innovation Management 13 105ndash136
Cohen WM and Levinthal DA (1990) Absorptivecapacity a new perspective on learning and inno-vation Administrative Science Quarterly 35 128ndash152
Cooper RG (1979a) The dimensions of industrialnew product success and failure Journal of Mar-keting 43 93ndash103
Cooper RG (1979b) Identifying industrial newproduct success Project NewProd Industrial Mar-keting Management 8 124ndash135
Cooper RG (1984) The strategyndashperformance linkin product innovation RampD Management 14 247ndash259
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Innovation management measurement A review
Cooper RG (1990) Stage-gate systems a new toolfor managing new products Business Horizons 3344ndash56
Cooper RG and Kleinschmidt EJ (1990) Newproduct success factors a comparison of lsquokillsrsquoversus successes and failures RampD Management20 47ndash64
Cooper RG and Kleinschmidt EJ (1995) Bench-marking the firmrsquos critical success factors in newproduct development Journal of Product Innova-tion Management 12 374ndash391
Cooper RG Edgett SJ and Kleinschmidt EJ(1999) New product portfolio management prac-tices and performance Journal of Product Innova-tion Management 16 333ndash351
Cooper RG Edgett SJ and Kleinschmidt EJ(2001) Portfolio Management for New Products2nd edition Cambridge MA Perseus
Cooper RG Edgett SJ and Kleinschmidt EJ (2004)Benchmarking best NPD practices Research-Technology Management 47 50ndash59
Cordero R (1990) The measurement of innovationperformance in the firm an overview ResearchPolicy 19 185ndash192
Cormican K and OrsquoSullivan D (2004) Auditingbest practice for effective product innovationmanagement Technovation 24 819ndash829
Coughlan P Chiesa V and Voss C (1994) Evalu-ating leadership as an enabler of innovation InProceedings 2nd International Product Develop-ment Management Conference GothenburgSweden 30ndash31 May Brussels European Institutefor Advanced Studies in Management
Covin JG and Slevin DP (1989) Strategic manage-ment of small firms in hostile and benign environ-ments Strategic Management Journal 10 75ndash87
Daft R (1978) A dual-core model of organizationalinnovation Academy of Management Journal 21193ndash210
Damanpour F (1991) Organizational innovation ameta-analysis of effects of determinants and mod-erators Academy of Management Journal 34 555ndash590
Damanpour F (1996) Organizational complexity andinnovation developing and testing multiple contin-gency models Management Science 42 693ndash716
Davis MC (1998) Knowledge management Infor-mation Strategy The Executiversquos Journal 15 11ndash22
De Brentani U (1991) Success factors in developingnew business services European Journal of Mar-keting 25 33ndash60
De Leede J Nijhof AH and Fisscher OA (1999)The myth of self managing teams a reflection onthe allocation of responsibilities between individu-als teams and the organisation Journal of BusinessEthics 21 203ndash215
Deeds DL (2001) The role of RampD intensitytechnical development and absorptive capacity increating entrepreneurial wealth in high technologystart-ups Journal of Engineering and TechnologyManagement 18 29ndash47
Denyer D and Neely A (2004) Introduction to spe-cial issue innovation and productivity performancein the UK International Journal of ManagementReviews 45 131ndash135
Di Benedetto CA (1996) Identifying the key suc-cess factors in new product launch Journal ofProduct Innovation Management 16 530ndash544
Dodgson M and Hinze S (2000) Indicators used tomeasure the innovation process defects and possi-ble remedies Research Evaluation 8 101ndash114
Dougherty D and Cohen M (1995) Product inno-vation in mature firms In Bowman E and KogutB (eds) Redesigning the Firm New York OxfordUniversity Press
Dougherty D and Hardy C (1996) Sustained prod-uct innovation in large mature organizations over-coming innovation-to-organization problemsAcademy of Management Journal 39 1120ndash1153
DTI (1998) An Audience With Innovation Innovationin Management London Department of Trade andIndustry
Dyer B and Song XM (1998) Innovation strategyand sanctioned conflict a new edge in innovationJournal of Product Innovation Management 15505ndash519
Ekvall G (1996) Organizational climate for creativ-ity and innovation European Journal of Work andOrganizational Psychology 5 105ndash123
Ernst H (2002) Success factors of new productdevelopment a review of the empirical literatureInternational Journal of Management Reviews 41ndash40
Farrukh C Phaal R Probert D Gregory M andWright J (2000) Developing a process for therelative valuation of RampD programmes RampDManagement 30 43ndash53
Frenkel A Maital S and Grupp H (2000) Meas-uring dynamic technical change a technometricapproach International Journal of TechnologyManagement 20 429ndash441
Galunic DC and Rodan S (1998) Resource recom-binations and the firm knowledge structures and
copy Blackwell Publishing Ltd 2006 43
March 2006
the potential for Schumpeterian innovationStrategic Management Journal 19 1193ndash1201
Geisler E (1995) An integrated costndashperformancemodel of research-and-development evaluationOmega ndash International Journal of ManagementScience 23 281ndash294
Glaser BG and Strauss AL (1967) The Discoveryof Grounded Theory Strategies for QualitativeResearch London Aldine
Globe S Levy GW and Schwartz CM (1973)Key factors and events in the innovation processResearch Management 16 8ndash15
Goffin K and Pfeiffer R (1999) Innovation Man-agement in UK and German Manufacturing Com-panies London Anglo-German Foundation for theStudy of Industrial Society
Grant RM (1991) The resource-based theory ofcompetitive advantage implications for strategyformulation California Management Review 33114ndash135
Greve HR (2003) A behavioral theory of RampDexpenditures and innovations evidence fromshipbuilding Academy of Management Journal 46685ndash702
Griffin A (1997) PDMA research on new productdevelopment practices updating trends and bench-marking best practices Journal of Product Innova-tion Management 14 429ndash458
Griffin A and Page AL (1993) An interim reporton measuring product development success andfailure Journal of Product Innovation Manage-ment 10 291ndash308
Griliches Z (1990) Patent statistics as economicindicators a survey Journal of Economic Litera-ture 28 1661ndash1707
Hall DL and Nauda A (1990) An interactiveapproach for selecting IRampD projects IEEE Trans-actions on Engineering Management 37 126ndash133
Hauser JR and Zettelmeyer F (1997) Metrics toevaluate RDampE Research-Technology Manage-ment 40 32ndash38
Henriksen AD and Traynor AJ (1999) A practicalRampD project-selection scoring tool IEEE Trans-actions on Engineering Management 46 158ndash170
Hipp C and Grupp H (2005) Innovation in theservice sector the demand for service specific-innovation measurement concepts and typologiesResearch Policy 34 517ndash535
Holbek J (1988) The innovation design dilemmasome notes on its relevance and solutions InGroslashnhaug K and Kaufmann G (eds) Innovation
A Cross-Disciplinary Perspective NorwegianUniversity Press pp 253ndash277
Hope Hailey V (2001) Breaking the mould Innova-tion as a strategy for corporate renewal Inter-national Journal of Human Resource Management12 1126ndash1140
Hull R Coombs R and Peltu M (2000) Know-ledge management practices for innovation anaudit tool for improvement International Journalof Technology Management 20 633ndash656
Hultink EJ Hart S Robben HSJ and Griffin A(2000) Launch decisions and new product successan empirical comparison of consumer and indus-trial products Journal of Product Innovation Man-agement 17 5ndash23
Jassawalla AR and Sashittal HC (1999) Buildingcollaborative cross-functional new product teamsAcademy of Management Executive 13 50ndash63
Jenkins S Forbes S Durrani TS and BanerjeeSK (1997) Managing the product developmentprocess 1 An assessment International Journal ofTechnology Management 13 359ndash378
Kaplan RS and Norton DP (1992) The balancedscorecard ndash measures that drive performance HarvardBusiness Review JanuaryndashFebruary 71ndash79
Keller RT (1986) Predictors of performance ofproject groups in RampD organizations Academy ofManagement Journal 29 715ndash726
Kelm KM Narayanan VK and Pinches GE (1995)Shareholder value creation during research-and-development innovation and commercialization stagesAcademy of Management Journal 38 770ndash786
Kerssens-van Drongelen IC and Bilderbeek J(1999) RampD performance measurement morethan choosing a set of metrics RampD Management29 35ndash46
Kerssens-van Drongelen IC and de Weerd-Nederhof PC (1999) The use of performancemeasurement tools for balancing short- and long-term NPD performance International Journal ofInnovation Management 3 397ndash426
Kessler EH and Chakrabarti AK (1996) Innova-tion speed a conceptual model of context anteced-ents and outcomes Academy of ManagementReview 21 1143ndash1191
Kim B and Oh H (2002) An effective RampD per-formance measurement system survey of KoreanRampD researchers Omega ndash International Journalof Management Science 30 19ndash31
Kim J and Wilemon D (2002) Strategic issues inmanaging innovationrsquos fuzzy front-end EuropeanJournal of Innovation Management 5 27ndash39
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Innovation management measurement A review
Kimberly JR (1981) Managerial innovation InNystrom PC and Starbuck WH (eds) Handbookof Organizational Design Vol 1 New YorkOxford University Press pp 84ndash104
King N (1992) Modelling the innovation process anempirical comparison of approaches Journal ofOccupational and Organizational Psychology 6589ndash100
Kirton MJ (1976) Adaptors and innovators adescription and measure Journal of Applied Psy-chology 61 622ndash629
Kivimaumlki M Kuk G Elovainio M Thomson LKalliomaumlki-Levanto T and Heikkilauml A (1997)The team climate inventory (TCI) ndash four or fivefactors Testing the structure of TCI in samples oflow and high complexity jobs Journal of Occupa-tional and Organizational Psychology 70 375ndash389
Kivimaumlki M Lansisalmi H Elovainio M Heik-kila A Lindstrom K Harisalo R Sipila K andPuolimatka L (2000) Communication as a deter-minant of organizational innovation RampD Man-agement 30 33ndash42
Kleinknecht A (1987) Measuring RampD in smallfirms how much are we missing Journal of Indus-trial Economics 36 253ndash256
Koen P Ajamian G Burkart R Clamen ADavidson J DrsquoAmore R Elkins C Herald KIncorvia M Johnson A Karol R Seibert RSlavejkov A and Wagner K (2001) Providingclarity and a common language to the lsquofuzzy front endrsquoResearch-Technology Management 44 46ndash55
Koput K (1997) A chaotic model of innovativesearch some answers many questions Organiza-tion Science 8 528ndash542
Lawrence PR and Lorsch JW (1967) Organizationand Environment Harvard MA Harvard Univer-sity Press
Lee M Son B and Lee H (1996) Measuring RampDeffectiveness in Korean companies Research-Technology Management 39 28ndash31
Leonard D and Sensiper S (1998) The role of tacitknowledge in group innovation California Man-agement Review 40 112ndash132
Leseure M Birdi K Bauer J Denyer D andNeely A (2004) Adoption of Promising PracticeA Systematic Review of the Literature LondonAdvanced Institute of Management Research
Li HY and Atuahene-Gima K (2001) Productinnovation strategy and the performance of newtechnology ventures in China Academy of Man-agement Journal 44 1123ndash1134
Liao J Welsch H and Stoica M (2003) Organiza-tional absorptive capacity and responsivenessan empirical investigation of growth-orientedSMEs Entrepreneurship Theory and Practice 2863ndash86
Linstone HA and Turoff M (eds) (2002) The Del-phi Method Techniques and Applications httpwwwisnjitedupubsdelphibook
Loch C Stein L and Terwiesch C (1996) Meas-uring development performance in the electronicsindustry Journal of Product Innovation Manage-ment 13 3ndash20
Mathisen GE and Einarsen S (2004) A review ofinstruments assessing creative and innovative envi-ronments within organizations Creativity ResearchJournal 16 119ndash140
Maylor H (2001) Assessing the relationshipbetween practice changes and process improve-ment in new product development Omega ndashInternational Journal of Management Science 2985ndash96
McAdam RMS (1999) The process of knowledgemanagement within organizations a critical assess-ment of both theory and practice Knowledge andProcess Management 6 101ndash113
McManus RJ Wilson S Delaney BC Fitzmau-rice DA Hyde CJ Tobias RS Jowett S andHobbs FDR (1998) Review of the usefulness ofcontacting other experts when conducting a litera-ture search for systematic reviews British MedicalJournal 317 1562ndash1563
Miles RE and Snow CC (1978) Organization StrategyStructure and Process New York McGraw-Hill
Miller D and Friesen PH (1982) Innovation inconservative and entrepreneurial firms two modelsof strategic momentum Strategic ManagementJournal 3 1ndash24
Mintzberg H (1978) Patterns in strategy formationManagement Science 24 934ndash948
Mitroff I (1987) Business Not As Usual Rethinkingour Individual Corporate and Industrial Strategiesfor Global Competition London Jossey-Bass
Moenaert RK De Meyer A Souder WE andDeschoolmeester D (1995) RampDMarketing com-munication during the fuzzy front-end IEEETransactions on Engineering Management 42243ndash257
Neely A and Hii J (1998) Innovation and BusinessPerformance A Literature Review Report producedfor Government Office for the Eastern RegionCambridge The Judge Institute of ManagementStudies University of Cambridge
copy Blackwell Publishing Ltd 2006 45
March 2006
Nelson R and Winter G (1982) An EvolutionaryTheory of Economic Change Cambridge MABelknap Press
Nohria N and Gulati R (1996) Is slack good or badfor innovation Academy of Management Journal39 1245ndash1264
Nonaka I (1991) The knowledge-creating companyHarvard Business Review NovemberndashDecember96ndash104
Nonaka I and Takeuchi H (1995) The KnowledgeCreating Company How Japanese CompaniesCreate the Dynamics of Innovation New YorkOxford University Press
OrsquoBrien JP (2003) The capital structure implica-tions of pursuing a strategy of innovation StrategicManagement Journal 24 415ndash431
OrsquoReilly CA and Tushman ML (1997) Using cul-ture for strategic advantage promoting innovationthrough social control In Tushman ML andAnderson P (eds) Managing Strategic Innovationand Change A Collection of Readings New YorkOxford University Press pp 200ndash216
Oliver N Dewberry E and Dostaler I (1999) Newproduct development performance and practice aninternational benchmarking study in the consumerelectronics industry In Proceedings 6th Inter-national Product Development Management Confer-ence Cambridge UK Brussels European Institutefor Advanced Studies in Management
Pakes A and Griliches Z (1980) Patents and RampDat the firm level a first report Economic Letters 5377ndash381
Parthasarthy R and Hammond J (2002) Productinnovation input and outcome moderating effectsof the innovation process Journal of Engineeringand Technology Management 19 75ndash91
Patterson F (2003) Innovation potential indicatorAvailable at wwwoppcouk
Phelps B (2004) Smart Business Metrics MeasureWhat Really Counts and Manage What Makes theDifference London FT-Prentice Hall
Pinto JK and Prescott JE (1988) Changes in crit-ical success factors over the stages in the projectlife cycle Journal of Management 14 5ndash18
Pitt M and Clarke K (1999) Competing on compe-tence a knowledge perspective on the managementof strategic innovation Technology Analysis andStrategic Management 11 301ndash316
Pittaway L Robertson M Munir K Denyer D andNeely A (2004) Networking and Innovation in theUK a Systematic Review of the Literature LondonAdvanced Institute of Management Research
Porter ME and Ketels CHM (2003) UK Compet-itiveness Moving to the Next Stage DTI Econom-ics Paper No 3 URN 03899
Pugh DS Hickson DJ Hinings CR and TurnerC (1969) The context of organization structuresAdministrative Science Quarterly 14 91ndash114
Ramanujam V and Mensch GO (1985) Improvingthe strategyndashinnovation link Journal of ProductInnovation Management 2 213ndash223
Richard O McMillan A Chadwick K and DwyerS (2003) Employing an innovation strategy inracially diverse workforces ndash effects on firm per-formance Group amp Organization Management 28107ndash126
Rickards T (1991) Innovation and creativity treesand pathways RampD Management 21 97ndash108
Rochford L (1991) Generating and screening newproduct ideas Industrial Marketing Management20 287ndash296
Rothwell R (1992) Successful industrial innovationcritical factors for the 1990s RampD Management22 221ndash239
Rothwell R Freeman C Horseley A JervisVTP Robertson AB and Townsend J (1974)SAPPHO updated ndash Project SAPPHO phase IIResearch Policy 3 258ndash291
Saleh SD and Wang CK (1993) The managementof innovation ndash strategy structure and organiza-tional climate IEEE Transactions on EngineeringManagement 40 14ndash21
Schmidt RL and Freeland JR (1992) Recentprogress in modelling RampD project-selection proc-esses IEEE Transactions on Engineering Manage-ment 39 189ndash201
Schroeder RG Van de Ven AH Scudder GDand Polley D (1989) The development of innova-tion ideas In Van de Ven AH Angle HL andPoole M (eds) Research on the Management ofInnovation The Minnesota Studies New YorkHarper amp Row pp 107ndash133
Scott S and Bruce R (1994) Determinants ofinnovative behaviour a path model of individualinnovation Academy of Management Journal 37580ndash607
Shane S Venkataraman S and MacMillan I (1995)Cultural differences in innovation championingstrategies Journal of Management 21 931ndash952
Shepard HA (1967) Innovation-resisting and inno-vation producing organizations Journal of Busi-ness 40 470ndash477
Shin J and McClomb GE (1998) Top executiveleadership and organizational innovation an
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Innovation management measurement A review
empirical investigation of nonprofit human serviceorganizations (HSOS) Administration in SocialWork 22 1ndash21
Single AW and Spurgeon WM (1996) Creatingand commercializing innovation inside a skunkworks Research-Technology Management 39 38ndash41
Song XM and Parry ME (1996) What separatesJapanese new product winners from losersJournal of Product Innovation Management 13422ndash439
Souitaris V (2002) Firm-specific competenciesdetermining technological innovation a survey inGreece RampD Management 32 61ndash77
Stock GN Greis NP and Fischer WA (2001)Absorptive capacity and new product developmentJournal of High Technology ManagementResearch 12 77ndash91
Sundbo J (1997) Management of innovation inservices Service Industries Journal 17 432ndash455
Sveiby KE (1997) The New Organizational WealthManaging and Measuring Knowledge-BasedAssets San Francisco CA Berrett-Koehler
Szakonyi R (1994) Measuring RampD effectiveness IResearch-Technology Management 37 27ndash32
Thompson L (2003) Improving the creativity oforganizational work groups Academy of Manage-ment Executive 17 96ndash109
Tidd J Bessant J and Pavitt K (1997) ManagingInnovation Integrating Technological Market andOrganizational Change Chichester UK JohnWiley
Tipping J and Zeffren E (1995) Assessing thevalue of your technology ResearchndashTechnologyManagement 38 22ndash40
Trajtenberg M (1990) A penny for your quotes ndashpatent citations and the value of innovations RandJournal of Economics 21 172ndash187
Tranfield D Denyer D and Smart P (2003)Towards a methodology for developing evidence-informed management knowledge by means of asystematic review British Journal of Management14 207ndash222
Tsai W (2001) Knowledge transfer in intraorganiza-tional networks effects of network position andabsorptive capacity on business unit innovation andperformance Academy of Management Journal44 996ndash1004
Van Den Bulte C (2000) New product diffusionacceleration measurement and analysis MarketingScience 19 366ndash380
Verhaeghe A and Kfir R (2002) Managing innovationin a knowledge intensive technology organisation(KITO) RampD Management 32 409ndash417
Verworn B (2002) The fuzzy front end of productdevelopment an exploratory study In Proceedings9th International Product Development ManagementConference Sophia Antipolis France pp 863ndash878Brussels European Institute for Advanced Studiesin Management
Veryzer RW (1998) Discontinuous innovation andthe new product development process Journal ofProduct Innovation Management 15 304ndash321
Volberda HW (1996) Towards the flexible formhow to remain vital in hypercompetitive environ-ments Organizational Science 7 359ndash374
Von Hippel E (1986) Lead users a source of novelproduct concepts Management Science 32 791ndash805
Von Zedtwitz M (2002) Organizational learningthrough post-project reviews in RampD RampD Man-agement 32 255ndash268
Voss C Chase R and Roth A (1999) Internationalservice study Decision Line May 4ndash7
Vyakarnam S and Adams RJ (2001) Institutionalbarriers to enterprise support an empirical studyEnvironment and Planning C Government andPolicy 19 335ndash353
Werner BM and Souder WE (1997) MeasuringRampD performance ndash state of the art Research-Technology Management 40 34ndash42
West MA (1990) The social psychology of innova-tion in groups In West MA and Farr JL (eds)Innovation and Creativity at Work Psychologicaland Organizational Strategies Chichester UKJohn Wiley pp 309ndash333
West MA and Anderson NR (1996) Innovation intop management teams Journal of Applied Psychol-ogy 81 680ndash693
White A (2002) Enabling factors in the front end ofthe innovation process In Proceedings 9thInternational Product Development ManagementConference Sophia Antipolis France BrusselsEuropean Institute for Advanced Studies inManagement pp 879ndash887
Wolfe RA (1994) Organizational innovationreview critique and suggested research direc-tions Journal of Management Studies 31 405ndash431
Yoon E and Lilien GL (1985) A new productlaunch-time decision model Journal of ProductInnovation Management 3 134ndash144
Zahra SA and George G (2002) Absorptivecapacity a review reconceptualization and
copy Blackwell Publishing Ltd 2006 47
March 2006
extension Academy of Management Review 27185
Zaltman G Duncan R and Holbek J (1973) Inno-vations and Organizations New York John Wiley
Zien KA and Buckler SA (1997) From experiencedreams to market crafting a culture of innovationJournal of Product Innovation Management 14274ndash287
Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
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Innovation management measurement A review
has been physically assigned to a particularrole (Souitaris 2002) Shane et al (1995) pro-vide a series of reflective questions designedto allow organizations to determine for them-selves their expectations and understandingof the role of champion For example lsquoto whatextent should the organization make it possiblefor the people working on an innovation tobend the rules of the organization to developthe innovation or be allowed to bypass certainpersonnel procedures to get people committedto an innovationrsquo
It must be emphasized that the dominantperspective on strategy in the literature isone that examines the relationship betweenstrategy and performance However a smallnumber of studies have examined the natureof the transitions of these states as organiza-tions adopt and embed an innovation strategyThis sub-section of the literature is under-pinned by the assumption that firms that fol-low innovation strategies differ from otherfirms in several respects It is apparent thatmore innovative firms adopt different opera-tional strategies to accommodate flexibilityand quality capabilities (Alegre-Vidal et al2004) have different capital managementpractices to facilitate slack resources (OrsquoBrien2003) are more tolerant of internal conflict insupport of creativity (Dyer and Song 1998)and maintain organizational structures that arein the lsquointermediate zone between order anddisorderrsquo (Brown and Eisenhardt 1997 22)What is clear from this literature is that anytransition towards an innovation strategy willnecessarily take several years because of theresources and energy that are necessary beforesuch a transformation can even be triggered(Hope Hailey 2001)
Organizational Culture and Structure
Burns and Stalker (1961) described a contin-gency approach to innovation managementlater developed to include concepts of func-tional differentiation specialization and inte-gration (Lawrence and Lorsch 1967) whichsuggests that environmental change prompts a
realignment of the fit between strategy andstructure That is to perform effectively anorganization must be appropriately differenti-ated specialized and integrated Pugh et al(1969) argued that the structure of an organi-zation is strongly related to the context withinwhich it functions Our closing discussion inthe previous section that the characteristics oforganizations following an innovation-focusedstrategy will differ from those that do not isconsistent with this contingency approach andin the following we focus on those dimen-sions of culture and structure that have beenidentified to differentiate between innovativeand non-innovative organizations
Organizational culture and structure concernthe way staff are grouped and the organiza-tional culture within which they work Therehas been considerable work on the situationaland psychological factors supportive of inno-vation in organizations Indeed it has beenwidely demonstrated that the perceived workenvironment (comprising both structural andcultural elements) does make a difference tothe level of innovation in organizations (Ama-bile et al 1996 Ekvall 1996) Creative andinnovative behaviours appear to be promotedby work environment factors (Mathisen andEinarsen 2004) Indeed it is clear that organ-izations can create environments in whichinnovation can be encouraged or hampered(Dougherty and Cohen 1995 Tidd et al1997) A common theme is that of the poly-chronic organization ndash one with the capacityto be in two states at once (Becker andWhisler 1973) Shepard (1967) describes thisas a two-state organization manoeuvreingbetween loose and tight and Mitroff (1987)as business-as-usual versus business-not-as-usual More prosaically this means organiza-tions need to be able for example to providesufficient freedom to allow for the explorationof creative possibilities but sufficient controlto manage innovation in an effective and effi-cient fashion
Ernst (2002) specifies a range of genericcharacteristics for the dedicated project groupassigned the innovation task multidisciplinarity
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March 2006
dedicated project leader inter-functional com-munication and co-operation qualificationsand know-how of the project leader teamautonomy and responsibility for the processAnd these factors are echoed throughout theliterature Rothwell (1992) refers to them aslsquocorporate conditionsrsquo Chiesa et al (1996)lsquoenabling processesrsquo and OrsquoReilly and Tushman(1997) lsquonorms for innovation and changersquoHowever despite their perceived importancethere is little guidance on how to measurethem
Volberda (1996) developed a conceptualmodel of alternative flexible organizationalforms that are argued to initiate or respondbetter to different types of competition Yet inspite of its importance there is relatively littleevidence of extant measures of flexibility inthe literature Rothwell (1992) and Ekvall(1996) propose a range of foci for measures oforganizational and production flexibility suchas lsquocorporate flexibility and responsiveness tochangersquo Coughlan (1994) considers the flexi-bility of resource allocation Several measuresof personnel flexibility are evident such aslsquothe adaptiveness of RampD personnel to tech-nology changesrsquo (Lee et al 1996) and lsquothewillingness to try new procedures and toexperiment with change so as to improve asituation or a processrsquo (Abbey and Dickson1983) At the level of the firm Liao et al(2003) introduce a similar construct ndash lsquoorgan-izational responsivenessrsquo
Organizational complexity the amount ofspecialization and task differentiation report-edly have a positive relationship (Damanpour1996) though Wolfe (1994) argues that it mayfavour initiation at the expense of implemen-tation Administrative intensity that is theratio of managers to total employees favoursadministrative innovation (Damanpour 19911996) but possibly at the cost of other pro-duct or technological innovations (Doughertyand Hardy 1996) Centralization the concen-tration of decision-making authority at the topof the organizational hierarchy and formaliza-tion the degree of emphasis on following rulesand procedures in role performance have both
been shown to have a negative impact on organ-izational innovation (Burns and Stalker 1961Damanpour 1991) Indeed rigidity in rulesand procedures may prohibit organizationaldecision-makers from seeking new sources ofinformation (Vyakarnam and Adams 2001)
Underlying the concept of the workplaceenvironment are issues related to the manage-ment of human resources and the creation ofa culture or climate in which individuals per-ceive innovation to be a desired and supportedorganizational objective There has been con-siderable empirical work on organizationalclimates supportive of the innovation processand several measurement instruments havebeen developed which Mathisen and Einarsen(2004) review The Team Climate Inventory(TCI) (Anderson and West 1996 1998) andthe KEYS instrument for assessing the workenvironment for creativity (Amabile et al 1996)have been found to be robust and rigorous
The TCI has been applied and validated inseveral studies (Agrell and Gustafson 1994Anderson and West 1998 Kivimaumlki et al1997 West and Anderson 1996) Replicationstudies using the TCI have found it canexplain a large part of the variance in teamsrsquoinnovative performance (Agrell and Gustafson1994) The TCI is based around four mainfactors participative safety (how participativeis the team in decision-making proceduresand how psychologically secure do teammembers feel about proposing new andimproved ways of doing things) support forinnovation (the degree of practical support forinnovation attempts contrasted with the rheto-ric of professed support by senior manage-ment) vision (how clearly defined sharedattainable and valued are the teamrsquos objectivesand vision) and task orientation (the com-mitment of the team to achieve the highestpossible standards of task performance includ-ing the use of constructive progress monitor-ing procedures) (Anderson and West 1996)Kivimaumlki et al (1997) suggested a fifth factorlsquointeraction frequencyrsquo relating to the regularityof contact and communication within theproject team
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Innovation management measurement A review
There is general agreement about theimportance of individual and group autonomyin the innovation process (Amabile 1998)Zien and Buckler (1997) emphasize the needfor freedom to experiment and the creation ofsafe havens without which innovation out-come might be constrained Measures ofautonomy mix both qualitative and quantita-tive approaches For example lsquothe degree offreedom personnel have in day-to-day operat-ing decisions such as when to work andhow to solve job problems including freedomfrom constant evaluation and close supervi-sionrsquo (Abbey and Dickson 1983) or lsquopercent-age of RampD portfolio with explicit businessunit andor corporate business managementsign-offrsquo (Tipping and Zeffren 1995) Addition-ally several authors have proposed generalmeasures of autonomy such as lsquofreedom tomake operating decisionsrsquo (Abbey and Dick-son 1983) or lsquodegree of empowermentrsquo (deLeede et al 1999 Tipping and Zeffren1995)
Morale and motivation are dimensions ofthe innovative organization that can be meas-ured as they pertain to individuals ndash lsquotheextent to which personnel are well rewardedrsquo(Abbey and Dickson 1983) to groups ndash lsquoourreward system is more group-based thanindividual-basedrsquo (Parthasarthy and Hammond2002) and to the organization as a whole ndashlsquothe degree to which the organization attemptsto excelrsquo (Abbey and Dickson 1983) Aspectsof morale and motivation that have beenmeasured include trust (Miller and Friesen1982) and job satisfaction which has beenmeasured by Keller (1986) on a 20-item scale
Organizational culture may include a sharedvision and it has been argued that the clearerthe vision the more effective it is as a facilitatorof innovation as it enables focused develop-ment of new ideas that can be assessed moreprecisely (West 1990) Pinto and Prescott(1988) found that the only factor to have pre-dictive power in terms of potential for successat all stages of the innovation process (con-ception planning execution and termination)was having a clearly stated missionvision
while West (1990) contends that the quality ofinnovation is partly a function of visionKeller (1986) adopts Kirtonrsquos (1976) 32-itemadopterndashinnovator inventory to determineindividual and team orientation to innovationVision is operationalized in the team climateinventory (cf Agrell and Gustafson 1994Anderson and West 1996 1998 West andAnderson 1996) and is deconstructed into aseries of sub-dimensions such as clarity shared-ness attainability and value with regard toteam objectives
Another aspect of culture is the propensityto take risks Saleh and Wang (1993) describethis as a willingness to confront risky oppor-tunities and tolerate failure and learn fromdoing so rather than recklessly gamblingSimilarly West (1990) demonstrated thathigher levels of participative safety facilitateinnovation Participative safety is non-judgmental supportive and characterized bysocio-emotional cohesiveness The attractive-ness of the organization as a place to workand undertake innovative activities is used byGeisler (1995) as an indicator of the climatefor innovation measured by numbers of can-didates applying for positions and the ageprofile of scientists and engineers Keller(1986) offers a slightly different perspectiveon participative safety with the constructlsquogroup cohesivenessrsquo which he operational-izes using an established five-item measure
This review has described a wide variety ofmeasures proposed for organizational cultureand structure Unlike some other aspects ofinnovation management this area has receivedextensive measurement attention HoweverHolbek (1988) argues that innovating organi-zations must adopt contrasting structures andclimates as they move from the initiation tothe implementation stages of innovationChesborough and Teece (1996) and Burns andStalker (1961) argue that there is a relation-ship between organizational design and typeof innovation It is a significant gap in innova-tion measurement that there appears to be nomeasures that adequately capture or articulatethis sense of structural shift
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March 2006
Portfolio Management
The importance of portfolio management tosuccessful product innovation has recentlyemerged as a key theme in the literature Itis important because of the rapidity at whichresources are consumed in the innovationprocess and the need for these to be managed(Cebon and Newton 1999) The effectivenesswith which an organization manages its RampDportfolio is often a key determinant of itscompetitive advantage (Bard et al 1988) Thefocus of portfolio management is on makingstrategic technological and resource choicesthat govern project selection and the futureshape of the organization (Cooper et al 1999)The problems of allocation of resources evalu-ation selection and termination of projects inachieving the optimal portfolio have beenextensively investigated The models all havethe objective of devising means to allocateresources to projects to obtain the optimalbalance in the product development portfoliothat is arriving at a portfolio that optimizesthe trade-off between returns and risks
The process of selecting innovation projectsrequires evaluation and resource allocationunder uncertain conditions It is argued that asystematic process guided by clear selectioncriteria can help optimize the use of limitedresources and enhance an organizationrsquoscompetitive position (Hall and Nauda 1990)The earliest models used return on investmentas the primary decision criteria (Bard et al 1988)Following this increasingly sophisticatedmathematical tools were developed to resolvewhat Schmidt and Freeland (1992) describe asthe constrained optimization problem that isto maximize the output (according to specifiedcriteria) from a subset of available inputsThese project selection models lsquohave beenvirtually ignored by industryrsquo (Schmidt andFreeland 1992 190) Part of the reason forthis is the inherent complexity of some ofthese models but also that they fail to takeinto account organizational decision andcommunication processes More recentlymodels have tried to take account of these
more qualitative factors involved in decisionprocesses
Scoring models require respondents tospecify the merit of any project proposalaccording to a set of a priori criteria whichmay be objective or subjective (Hall andNauda 1990) Economic and benefit modelsattempt to compute the cost benefit or finan-cial risk of pursuing a specific project whilemathematical programming approaches seekto optimize some objective function(s) subjectto specified resource constraints Algorithmsof varying complexity exist requiring moni-toring and significant data entry and whilemany are conceptually attractive surveys donot show widespread utilization of thesetechniques (Hall and Nauda 1990) Theseapproaches are all based on financial meas-ures such as internal rate of return net presentvalue and return on investment At the otherend of the spectrum qualitative approachessuch as peer review and mental checklistsrely on subjective perceptions and measuresof portfolio balance (Cooper et al 2001Henriksen and Traynor 1999)
Cooper et al (1999) find that best performersuse explicit formalized tools and consist-ently apply them to all projects considered tobelong to a portfolio A series of measures canbe identified that evaluate the whole portfolioof innovation projects to answer questionssuch as lsquois it balanced in terms of quantity ofshort- and long term-projectsrsquo and lsquois there abalance between high and low risk projectsand large and small projectsrsquo (Brenner 1994Cooper et al 2001) Another set seeks to iden-tify the extent to which portfolio evaluationmeasures are formalized within the organiza-tionrsquos processes (Cebon and Newton 1999Chiesa et al 1996 Farrukh et al 2000 Millerand Friesen 1982) Yet another approach is toview project evaluation and selection as anorganizational capability and attempt to deter-mine a level of proficiency (Szakonyi 1994)Finally there is a series of post hoc measuresof the appropriateness of project selections inthe light of results and alignment with busi-ness objectives (Lee et al 1996)
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Innovation management measurement A review
Project Management
Project management is concerned with theprocesses that turn the inputs into a marketa-ble innovation The innovation process iscomplex comprising a myriad of events andactivities some of which can be identified as asequence and some of which occur concur-rently and it is clearly possible that innova-tion processes will differ to some degreeacross organizations and even within organi-zations on a project-by-project basis Havingan efficient process that is able to manage theambiguity of the innovation is universally agreedto be critical to innovation (Globe et al 1973)
Various approaches have been taken tomodelling innovation processes as a series ofevents (Zaltman et al 1973) as a social interac-tion (Voss et al 1999) as a series of transactions(Nelson and Winter 1982) and as a process ofcommunication (Farrukh et al 2000) The his-tory of project management research is partlycharacterized by a debate regarding the extentto which events and activities within the processoccur in linearly sequential discrete identifiablestages (Zaltman et al 1973) or whether eventsare more disorganized (King 1992) or evenchaotic (Koput 1997) However despite thesedifferent viewpoints there are a number ofcommon elements that can be summarized asthe major components of the innovation projectmanagement These are project efficiencytools communications and collaboration
Several studies make efforts to measureproject management efficiency mostly in theform of comparisons between budget and actual(project costs project duration revenue fore-casting) Another measure of project manage-ment success is speed Innovation speed hasbeen positively correlated with product qual-ity or the degree to which it satisfies customerrequirements measures include speed (Hauserand Zettelmeyer 1997) performance againstschedule (Chiesa and Masella 1994) and dura-tion of the process (Cebon and Newton 1999)
To achieve efficiency it is widely recom-mended that organizations seeking to innovateshould establish formal processes for innovat-
ing and make use of tools and techniquesthat may facilitate innovative endeavours Thestage-gate process (Cooper 1990) is possiblythe most familiar of these but other method-ologies for innovation project managementexist including Phased Development Productand Cycle-time Excellence and Total Design(see Jenkins et al (1997) for a discussion)These methodologies have in common theseparation of the product development processinto structured and discrete stages which eachhave milestones in the form of quality controlcheckpoints at which stopgo decisions are madewith regard to the progress of the project Thesehighly structured approaches to the manage-ment of the innovation process began toemerge in the 1990s (Veryzer 1998) The useof structured tools and processes can bemeasured by project process evaluations forexample the use of a formal problem-findingproblem-solving cycle (Bessant 2003) the useof formal post-launch evaluation procedures(Atuahene-Gima 1995) or the use of certifiedprocesses (Chiesa et al 1996) These rathergeneral process measures have been supple-mented by measures of the use of specificinstruments and tools such as interactiveCAD or CAM (Maylor 2001) or the use ofcomputer-integrated manufacturing processes(Parthasarthy and Hammond 2002) but wenote that these measures betray the technologicaland NPD heritage that underpins many of theinnovation measures identified in this reviewEquivalents for service industry public ornot-for-profit sector innovations are somewhatlacking in the literature and constitute aresearch gap
Communications are important in projectmanagement Damanpour (1991) demon-strated the existence of a positive relationshipbetween internal communication and innova-tion Internal communication facilitates thedispersion of ideas within an organizationincreases the diversity and also contributes tothe team lsquoclimatersquo Communication can bemeasured by various integration mechanismseg committees numbers of meetings andcontacts (Damanpour 1991) There are also
copy Blackwell Publishing Ltd 2006 37
March 2006
measures of external communications whichtend to focus on whether communication istaking place the level at which it occurs andwith whom (Cebon and Newton 1999 Leeet al 1996 Rothwell 1992 Souitaris 2002)These measures of internal and external com-munication in the literature are based on bothsubjective evaluations and objective frequencycounts Subjective measures include lsquowe alwaysconsult supplierscustomers on new productideasrsquo (Parthasarthy and Hammond 2002) andlsquodegree of organization members involved andparticipating in extra-organizational professionalactivitiesrsquo (Damanpour 1991) Objective countsinclude (Damanpour 1991) lsquoextent of commu-nication amongst organizational units or groupsmeasured by various integrating mechanismssuch as numbers of committees and frequencyof meetingsrsquo (Anderson and West 1998)lsquofrequency of formal meetings concerningnew ideasrsquo (Souitaris 2002 Szakonyi 1994)lsquohow well do the technical and finance peoplecommunicate with one anotherrsquo
It is widely recognized that collaboratingwith suppliers (Bessant 2003) and customers(von Hippel 1986) can also make a significantcontribution to the innovation processMeasures of collaborative working includethe use of guest engineers (Maylor 2001) thepercentage of projects in co-operation withthird parties (Kerssens-van Drongelen andBilderbeek 1999) and the extent to whichdecision-making at top levels is characterizedby cross-functional discussions (Miller andFriesen 1982) In addition Jassawalla andSashittal (1999) identify some characteristicsof internal collaboration ie that teams arecharacterized by their mindfulness levels ofat-stakeness synergy and transparency butthey do not suggest how these aspects mightbe measured which constitutes a furtherresearch gap
Commercialization
Commercialization can be considered to bethe second of the two phases in Zaltman et alrsquos(1973) conceptualization of the innovation
process that is lsquoimplementationrsquo This canmean taking an innovation to market (Chakra-vorti 2004) but may also include convincingproduction managers to adopt a series of newtechniques available to them (Single andSpurgeon 1996) Indeed the successful intro-duction of new products and services intomarkets is important for the survival andgrowth of organizations Kelm et al (1995)regard commercialization as a transitionalphase in which the organization becomesless reliant on its technological capabilities(important during the activities of initiation)but more dependent on market dynamicsCommercialization is concerned with makingthe innovative process or product a commer-cial success it includes issues such as market-ing sales distribution and joint venturesWhile technical capabilities are important forthe early stages of the innovation process anddevelopment activities for the launch andimplementation stage it is marketing capabili-ties (market investigation market testingpromotion etc) that are significant (Calantoneand di Benedetto 1988 Globe et al 1973)Verhaeghe and Kfir (2002) consider aspectsof commercialization under the headings ofmarket analysis and monitoring reaching thecustomer and market planning
Firm-level measures of the launch or com-mercialization process appear to be relativelythin In their description of the RampD processBalachandra and Brockhoff (1995) character-ize the commercialization stage as requiringlsquobig bucksrsquo market reviews and organiza-tional commitment Most measures appear tobe not much more sophisticated than thisMeasures are frequently restricted to numbersof products launched in a given period (egYoon and Lilien 1985) There is thoughsome focus on market analysis and monitor-ing (Verhaeghe and Kfir 2002) Song andParry (1996) employ a set of measures oflaunch proficiency (salesforce distributionaland promotional support) that directly addressthe lsquoadequacyrsquo of the organizationrsquos facilities inthese areas as do Avlonitis et al (2001) Andthere is a limited mention of the commercial
38 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
intentions of an organizationrsquos competitors(Calantone and di Benedetto 1988) Thethemes of proficiency of personnel in this area(eg Atuahene-Gima 1995 Cebon and New-ton 1999) of adherence to a commercializa-tion schedule (eg Griffin and Page 1993) andof formal post-launch reviews (Atuahene-Gima 1995 von Zedtwitz 2002) can also befound in the literature
Even in the work that addresses post-project reviews very little attention is directedtowards measuring innovation launch orcommercialization However this comes aslittle surprise as Hultink et al (2000) recentlyobserved that little work has been done in thearea perhaps because at least in the innova-tion literature launch activities appear to beconsidered the domain of other specialistsparticularly marketers and the process is seenas separate from innovation In their studythey investigated launch decisions associatedwith success for consumer and business-to-business products Much of the literature thatconsiders launch and commercialization doesso from the viewpoint of the adopter andassesses rates of adoption and diffusion ofinnovations over time across populations(Kessler and Chakrabarti 1996 Van DenBulte 2000)
The area of commercialization appears tobe the least developed of the issues involvedin innovation management This is a huge gapbecause without this last step the previoussteps of assembling inputs project manage-ment etc will not result in a commerciallyviable outcome for the firm We believe thatthis area of innovation is in urgent need offurther development from both theory andmeasurement viewpoints
Discussion
Innovation management measurement is acritical discipline for both academics andpractitioners The capacity of organizations toinnovate is determined by multiple factors thatrelate both to their own internal organizationand to their market environment (Rothwell
et al 1974) and the task of generating andthen converting ideas into usable and market-able products requires high levels of inter-functional co-ordination and integration Thispaper opened with the general observationthat innovation measurement does not appearto take place routinely within managementpractice and that where it does it tends tofocus on output measures Further from therelatively small number of empirical studiesof measurement in practice measurement ofinnovation management appears to be under-taken infrequently in an ad hoc fashion andrelies on dated unbalanced or under-specifiedmodels of the innovation management phe-nomenon This suggests that a large part ofthe contemporary conceptualization of theinnovation management phenomenon is over-looked in practitionersrsquo measurement prac-tices and consequently that opportunities forthe more efficient and effective managementof the innovation process are not realizedSome possible reasons for this state of affairsare failure of academics to communicate ade-quately inconsistency inaccessibility andcomplexity of measures and poor synthesisand packaging
Following a review and synthesis of theliterature we proposed a seven-dimensionalconceptualization of the innovation manage-ment phenomenon and applied it to an exam-ination of the measurement problem Throughthe application of this framework to their ownparticular context it is suggested that practi-tioners will be able to conduct an evaluationof their own innovation management activityidentify gaps weaknesses or deficiencies andalso improvement potential Further it ishoped that organizations applying the frame-work will be able to tease out areas whereinnovation is only nominally adopted in theirprocesses and identify areas where attentionand resources might be focused
From the perspective of its management itis no longer sufficient to treat innovation as alinear process where resources are channelledat one end from which emerges a new prod-uct or process The measurement framework
copy Blackwell Publishing Ltd 2006 39
March 2006
presented in Table 2 shows the breadth andvariety of elements of innovation managementthat ideally need to be measured There havebeen several studies that have investigated thelimitations of various approaches to measure-ment (eg Werner and Souder 1997) and ofspecific measures (eg Trajtenberg 1990) asthey relate to the practice of innovation Thechoice of an appropriate RampD measurementmetric depends on the userrsquos needs in terms ofcomprehensiveness of measurement type ofRampD being measured available data andamount of effort the user can afford to allocateto the exercise Nonetheless the commonciting across various papers of the measuresnoted in the innovation management frame-work presented here suggests that a base setof innovation management measures isimplicitly present in the literature eventhough they may be fragmented in appearanceand presentation By pulling together theinnovation management framework fromdiverse sources this paper aims to bring suchissues into the open and identify relevantresearch gaps Table 2 can be viewed as thebasis for a balanced scorecard (Kaplan andNorton 1992) for innovation managementthat is as a balanced set of areas that need tobe measured in order to gain insight into anorganizationrsquos holistic ability to manage inno-vation Such multidimensional approaches tomeasurement have been found in other areasof management to be an improvement on sim-ple one-dimensional measures and to be ableto capture both short- and long-term aspectsof value creation in the firm (Phelps 2004)
We have identified a large number of meas-ures and approaches in a variety of innovationmanagement areas and we have constructed ageneric set of innovation management meas-urement areas to act as a framework for bal-anced measurement However in several ofthese areas measurement gaps have beenidentified These gaps are of two types valid-ity gaps and omission gaps Validity gaps arisewhere there is insufficient evidence that pro-posed measures actually do capture drivers oroutputs of innovation management for example
we have noted the objections to counts ofpatents or increasing expenditure on RampD beingused as measures of innovative organizationsSimilarly there is an absence of evidence thatthe large number of subjective perceptions ofinnovation management practices proposed(lsquowe do Arsquo lsquowe are good at Brsquo) actually relateto innovation management performance
Omission gaps occur where the importanceof an aspect of innovation management is sup-ported in the literature but measures for thisaspect are lacking Omission gaps are particu-larly prevalent in the elements of innovationmanagement such as knowledge managementinnovation strategy and commercializationthat do not feature strongly in the literature ontechnological and manufacturing-based inno-vation Another area traditionally not givenmuch emphasis in this literature is organiza-tion and culture which fortunately is bettertreated by the organizational behaviour litera-ture where a number of measures have beendeveloped Much of the current state of meas-urement practice can be traced back to the dis-ciplinersquos early manufacturing RampD and NPDfocus While product innovation is undoubt-edly important it is only one dimension of anorganizationrsquos innovation agenda Process andorganizational innovations are recognizedtoo as critical for competitiveness yet theseperspectives are inadequately represented inmeasurement terms
General areas of omission in this fieldrelate to an over-reliance on financial meas-ures rather than process measures for exam-ple the use of financial measures of portfoliooptimization but an absence of portfoliocapability measures a similar reliance oncodified knowledge such as patents to theexclusion of more intangible measures suchas tacit knowledge the measurement of levelsof resources or activities with no indication ofwhat an optimal level would be the measure-ment of drivers of innovation without meas-ures of whether these drivers are aligned witheach other and with firm strategy measures ofpresence that do not measure quality (eg theuse of dichotomous (yesno) measures that do
40 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
not indicate how well an action is implementedand measures of the presence of leadership(such as champions) but not of quality ofleadership) a general absence of measuresfor important properties of organizationalstructures such as flexibility and a lack ofmeasures of the match between structure andenvironment a technological and NPD bias toproject management measures and a relativeabsence of measures for service sectors apaucity of measures for internal communica-tions and a general lack of measures forcommercialization management ndash in particulararound marketing and sales capabilities forinnovative products and services All thesegaps provide the potential for further researchin innovation management measurement
The absence of an accepted framework ofinnovation management measures leads notonly to the gaps identified above but also toother problems in the literature One is that itis frequently unclear whether or not the met-rics used are of the researchersrsquo own devisingdrawn from the literature or are what are usedby the organizations being studied Nor is italways clear when metrics are devised orrecommended whether they are intended foruse in a research capacity or for managementtasks Further the measures proposed in theliterature often seem to be proposed abstractlywith little consideration given to the use ofmeasures as a management tool in the day-to-day context of managing innovation In theabsence of a comprehensive framework forinnovation management measurement organ-izations will inevitably resort to ad hoc andpartial metrics which can encourage wastefulpractice (eg measuring innovation managementcapability according to annual RampD spend)We hope that the framework constructed inthis paper will be useful in the constructionof comprehensive measures of innovationmanagement
Acknowledgements
The research reported here was supported bya grant from Cranfield School of Management
the authors gratefully acknowledge this supportFurther the authors are grateful to the editorsand two anonymous reviewers for their helpfuland insightful comments on previous versionsof this paper
Note
1 Corresponding author Telephone +44 (0) 207594 9137 e-mail radamsimperialacuk
References
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Ambrosini V and Bowman C (2001) Tacit know-ledge some suggestions for operationalisationJournal of Management Studies 38 811ndash829
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Atuahene-Gima K (1995) An exploratory analysisof the input of market orientation on new productperformance a contingency approach Journal ofProduct Innovation Management 12 275ndash293
Avlonitis GJ Papastathopoulou PG and Gounaris SP(2001) An empirically-based typology of productinnovativeness for new financial services success
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March 2006
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Burns TR and Stalker GM (1961) The Manage-ment of Innovation London Tavistock
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Chiesa V Coughlan P and Voss A (1996) Devel-opment of a technical innovation audit Journal ofProduct Innovation Management 13 105ndash136
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Cooper RG (1979b) Identifying industrial newproduct success Project NewProd Industrial Mar-keting Management 8 124ndash135
Cooper RG (1984) The strategyndashperformance linkin product innovation RampD Management 14 247ndash259
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Innovation management measurement A review
Cooper RG (1990) Stage-gate systems a new toolfor managing new products Business Horizons 3344ndash56
Cooper RG and Kleinschmidt EJ (1990) Newproduct success factors a comparison of lsquokillsrsquoversus successes and failures RampD Management20 47ndash64
Cooper RG and Kleinschmidt EJ (1995) Bench-marking the firmrsquos critical success factors in newproduct development Journal of Product Innova-tion Management 12 374ndash391
Cooper RG Edgett SJ and Kleinschmidt EJ(1999) New product portfolio management prac-tices and performance Journal of Product Innova-tion Management 16 333ndash351
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Cooper RG Edgett SJ and Kleinschmidt EJ (2004)Benchmarking best NPD practices Research-Technology Management 47 50ndash59
Cordero R (1990) The measurement of innovationperformance in the firm an overview ResearchPolicy 19 185ndash192
Cormican K and OrsquoSullivan D (2004) Auditingbest practice for effective product innovationmanagement Technovation 24 819ndash829
Coughlan P Chiesa V and Voss C (1994) Evalu-ating leadership as an enabler of innovation InProceedings 2nd International Product Develop-ment Management Conference GothenburgSweden 30ndash31 May Brussels European Institutefor Advanced Studies in Management
Covin JG and Slevin DP (1989) Strategic manage-ment of small firms in hostile and benign environ-ments Strategic Management Journal 10 75ndash87
Daft R (1978) A dual-core model of organizationalinnovation Academy of Management Journal 21193ndash210
Damanpour F (1991) Organizational innovation ameta-analysis of effects of determinants and mod-erators Academy of Management Journal 34 555ndash590
Damanpour F (1996) Organizational complexity andinnovation developing and testing multiple contin-gency models Management Science 42 693ndash716
Davis MC (1998) Knowledge management Infor-mation Strategy The Executiversquos Journal 15 11ndash22
De Brentani U (1991) Success factors in developingnew business services European Journal of Mar-keting 25 33ndash60
De Leede J Nijhof AH and Fisscher OA (1999)The myth of self managing teams a reflection onthe allocation of responsibilities between individu-als teams and the organisation Journal of BusinessEthics 21 203ndash215
Deeds DL (2001) The role of RampD intensitytechnical development and absorptive capacity increating entrepreneurial wealth in high technologystart-ups Journal of Engineering and TechnologyManagement 18 29ndash47
Denyer D and Neely A (2004) Introduction to spe-cial issue innovation and productivity performancein the UK International Journal of ManagementReviews 45 131ndash135
Di Benedetto CA (1996) Identifying the key suc-cess factors in new product launch Journal ofProduct Innovation Management 16 530ndash544
Dodgson M and Hinze S (2000) Indicators used tomeasure the innovation process defects and possi-ble remedies Research Evaluation 8 101ndash114
Dougherty D and Cohen M (1995) Product inno-vation in mature firms In Bowman E and KogutB (eds) Redesigning the Firm New York OxfordUniversity Press
Dougherty D and Hardy C (1996) Sustained prod-uct innovation in large mature organizations over-coming innovation-to-organization problemsAcademy of Management Journal 39 1120ndash1153
DTI (1998) An Audience With Innovation Innovationin Management London Department of Trade andIndustry
Dyer B and Song XM (1998) Innovation strategyand sanctioned conflict a new edge in innovationJournal of Product Innovation Management 15505ndash519
Ekvall G (1996) Organizational climate for creativ-ity and innovation European Journal of Work andOrganizational Psychology 5 105ndash123
Ernst H (2002) Success factors of new productdevelopment a review of the empirical literatureInternational Journal of Management Reviews 41ndash40
Farrukh C Phaal R Probert D Gregory M andWright J (2000) Developing a process for therelative valuation of RampD programmes RampDManagement 30 43ndash53
Frenkel A Maital S and Grupp H (2000) Meas-uring dynamic technical change a technometricapproach International Journal of TechnologyManagement 20 429ndash441
Galunic DC and Rodan S (1998) Resource recom-binations and the firm knowledge structures and
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the potential for Schumpeterian innovationStrategic Management Journal 19 1193ndash1201
Geisler E (1995) An integrated costndashperformancemodel of research-and-development evaluationOmega ndash International Journal of ManagementScience 23 281ndash294
Glaser BG and Strauss AL (1967) The Discoveryof Grounded Theory Strategies for QualitativeResearch London Aldine
Globe S Levy GW and Schwartz CM (1973)Key factors and events in the innovation processResearch Management 16 8ndash15
Goffin K and Pfeiffer R (1999) Innovation Man-agement in UK and German Manufacturing Com-panies London Anglo-German Foundation for theStudy of Industrial Society
Grant RM (1991) The resource-based theory ofcompetitive advantage implications for strategyformulation California Management Review 33114ndash135
Greve HR (2003) A behavioral theory of RampDexpenditures and innovations evidence fromshipbuilding Academy of Management Journal 46685ndash702
Griffin A (1997) PDMA research on new productdevelopment practices updating trends and bench-marking best practices Journal of Product Innova-tion Management 14 429ndash458
Griffin A and Page AL (1993) An interim reporton measuring product development success andfailure Journal of Product Innovation Manage-ment 10 291ndash308
Griliches Z (1990) Patent statistics as economicindicators a survey Journal of Economic Litera-ture 28 1661ndash1707
Hall DL and Nauda A (1990) An interactiveapproach for selecting IRampD projects IEEE Trans-actions on Engineering Management 37 126ndash133
Hauser JR and Zettelmeyer F (1997) Metrics toevaluate RDampE Research-Technology Manage-ment 40 32ndash38
Henriksen AD and Traynor AJ (1999) A practicalRampD project-selection scoring tool IEEE Trans-actions on Engineering Management 46 158ndash170
Hipp C and Grupp H (2005) Innovation in theservice sector the demand for service specific-innovation measurement concepts and typologiesResearch Policy 34 517ndash535
Holbek J (1988) The innovation design dilemmasome notes on its relevance and solutions InGroslashnhaug K and Kaufmann G (eds) Innovation
A Cross-Disciplinary Perspective NorwegianUniversity Press pp 253ndash277
Hope Hailey V (2001) Breaking the mould Innova-tion as a strategy for corporate renewal Inter-national Journal of Human Resource Management12 1126ndash1140
Hull R Coombs R and Peltu M (2000) Know-ledge management practices for innovation anaudit tool for improvement International Journalof Technology Management 20 633ndash656
Hultink EJ Hart S Robben HSJ and Griffin A(2000) Launch decisions and new product successan empirical comparison of consumer and indus-trial products Journal of Product Innovation Man-agement 17 5ndash23
Jassawalla AR and Sashittal HC (1999) Buildingcollaborative cross-functional new product teamsAcademy of Management Executive 13 50ndash63
Jenkins S Forbes S Durrani TS and BanerjeeSK (1997) Managing the product developmentprocess 1 An assessment International Journal ofTechnology Management 13 359ndash378
Kaplan RS and Norton DP (1992) The balancedscorecard ndash measures that drive performance HarvardBusiness Review JanuaryndashFebruary 71ndash79
Keller RT (1986) Predictors of performance ofproject groups in RampD organizations Academy ofManagement Journal 29 715ndash726
Kelm KM Narayanan VK and Pinches GE (1995)Shareholder value creation during research-and-development innovation and commercialization stagesAcademy of Management Journal 38 770ndash786
Kerssens-van Drongelen IC and Bilderbeek J(1999) RampD performance measurement morethan choosing a set of metrics RampD Management29 35ndash46
Kerssens-van Drongelen IC and de Weerd-Nederhof PC (1999) The use of performancemeasurement tools for balancing short- and long-term NPD performance International Journal ofInnovation Management 3 397ndash426
Kessler EH and Chakrabarti AK (1996) Innova-tion speed a conceptual model of context anteced-ents and outcomes Academy of ManagementReview 21 1143ndash1191
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Kimberly JR (1981) Managerial innovation InNystrom PC and Starbuck WH (eds) Handbookof Organizational Design Vol 1 New YorkOxford University Press pp 84ndash104
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Kirton MJ (1976) Adaptors and innovators adescription and measure Journal of Applied Psy-chology 61 622ndash629
Kivimaumlki M Kuk G Elovainio M Thomson LKalliomaumlki-Levanto T and Heikkilauml A (1997)The team climate inventory (TCI) ndash four or fivefactors Testing the structure of TCI in samples oflow and high complexity jobs Journal of Occupa-tional and Organizational Psychology 70 375ndash389
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Kleinknecht A (1987) Measuring RampD in smallfirms how much are we missing Journal of Indus-trial Economics 36 253ndash256
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Nohria N and Gulati R (1996) Is slack good or badfor innovation Academy of Management Journal39 1245ndash1264
Nonaka I (1991) The knowledge-creating companyHarvard Business Review NovemberndashDecember96ndash104
Nonaka I and Takeuchi H (1995) The KnowledgeCreating Company How Japanese CompaniesCreate the Dynamics of Innovation New YorkOxford University Press
OrsquoBrien JP (2003) The capital structure implica-tions of pursuing a strategy of innovation StrategicManagement Journal 24 415ndash431
OrsquoReilly CA and Tushman ML (1997) Using cul-ture for strategic advantage promoting innovationthrough social control In Tushman ML andAnderson P (eds) Managing Strategic Innovationand Change A Collection of Readings New YorkOxford University Press pp 200ndash216
Oliver N Dewberry E and Dostaler I (1999) Newproduct development performance and practice aninternational benchmarking study in the consumerelectronics industry In Proceedings 6th Inter-national Product Development Management Confer-ence Cambridge UK Brussels European Institutefor Advanced Studies in Management
Pakes A and Griliches Z (1980) Patents and RampDat the firm level a first report Economic Letters 5377ndash381
Parthasarthy R and Hammond J (2002) Productinnovation input and outcome moderating effectsof the innovation process Journal of Engineeringand Technology Management 19 75ndash91
Patterson F (2003) Innovation potential indicatorAvailable at wwwoppcouk
Phelps B (2004) Smart Business Metrics MeasureWhat Really Counts and Manage What Makes theDifference London FT-Prentice Hall
Pinto JK and Prescott JE (1988) Changes in crit-ical success factors over the stages in the projectlife cycle Journal of Management 14 5ndash18
Pitt M and Clarke K (1999) Competing on compe-tence a knowledge perspective on the managementof strategic innovation Technology Analysis andStrategic Management 11 301ndash316
Pittaway L Robertson M Munir K Denyer D andNeely A (2004) Networking and Innovation in theUK a Systematic Review of the Literature LondonAdvanced Institute of Management Research
Porter ME and Ketels CHM (2003) UK Compet-itiveness Moving to the Next Stage DTI Econom-ics Paper No 3 URN 03899
Pugh DS Hickson DJ Hinings CR and TurnerC (1969) The context of organization structuresAdministrative Science Quarterly 14 91ndash114
Ramanujam V and Mensch GO (1985) Improvingthe strategyndashinnovation link Journal of ProductInnovation Management 2 213ndash223
Richard O McMillan A Chadwick K and DwyerS (2003) Employing an innovation strategy inracially diverse workforces ndash effects on firm per-formance Group amp Organization Management 28107ndash126
Rickards T (1991) Innovation and creativity treesand pathways RampD Management 21 97ndash108
Rochford L (1991) Generating and screening newproduct ideas Industrial Marketing Management20 287ndash296
Rothwell R (1992) Successful industrial innovationcritical factors for the 1990s RampD Management22 221ndash239
Rothwell R Freeman C Horseley A JervisVTP Robertson AB and Townsend J (1974)SAPPHO updated ndash Project SAPPHO phase IIResearch Policy 3 258ndash291
Saleh SD and Wang CK (1993) The managementof innovation ndash strategy structure and organiza-tional climate IEEE Transactions on EngineeringManagement 40 14ndash21
Schmidt RL and Freeland JR (1992) Recentprogress in modelling RampD project-selection proc-esses IEEE Transactions on Engineering Manage-ment 39 189ndash201
Schroeder RG Van de Ven AH Scudder GDand Polley D (1989) The development of innova-tion ideas In Van de Ven AH Angle HL andPoole M (eds) Research on the Management ofInnovation The Minnesota Studies New YorkHarper amp Row pp 107ndash133
Scott S and Bruce R (1994) Determinants ofinnovative behaviour a path model of individualinnovation Academy of Management Journal 37580ndash607
Shane S Venkataraman S and MacMillan I (1995)Cultural differences in innovation championingstrategies Journal of Management 21 931ndash952
Shepard HA (1967) Innovation-resisting and inno-vation producing organizations Journal of Busi-ness 40 470ndash477
Shin J and McClomb GE (1998) Top executiveleadership and organizational innovation an
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Innovation management measurement A review
empirical investigation of nonprofit human serviceorganizations (HSOS) Administration in SocialWork 22 1ndash21
Single AW and Spurgeon WM (1996) Creatingand commercializing innovation inside a skunkworks Research-Technology Management 39 38ndash41
Song XM and Parry ME (1996) What separatesJapanese new product winners from losersJournal of Product Innovation Management 13422ndash439
Souitaris V (2002) Firm-specific competenciesdetermining technological innovation a survey inGreece RampD Management 32 61ndash77
Stock GN Greis NP and Fischer WA (2001)Absorptive capacity and new product developmentJournal of High Technology ManagementResearch 12 77ndash91
Sundbo J (1997) Management of innovation inservices Service Industries Journal 17 432ndash455
Sveiby KE (1997) The New Organizational WealthManaging and Measuring Knowledge-BasedAssets San Francisco CA Berrett-Koehler
Szakonyi R (1994) Measuring RampD effectiveness IResearch-Technology Management 37 27ndash32
Thompson L (2003) Improving the creativity oforganizational work groups Academy of Manage-ment Executive 17 96ndash109
Tidd J Bessant J and Pavitt K (1997) ManagingInnovation Integrating Technological Market andOrganizational Change Chichester UK JohnWiley
Tipping J and Zeffren E (1995) Assessing thevalue of your technology ResearchndashTechnologyManagement 38 22ndash40
Trajtenberg M (1990) A penny for your quotes ndashpatent citations and the value of innovations RandJournal of Economics 21 172ndash187
Tranfield D Denyer D and Smart P (2003)Towards a methodology for developing evidence-informed management knowledge by means of asystematic review British Journal of Management14 207ndash222
Tsai W (2001) Knowledge transfer in intraorganiza-tional networks effects of network position andabsorptive capacity on business unit innovation andperformance Academy of Management Journal44 996ndash1004
Van Den Bulte C (2000) New product diffusionacceleration measurement and analysis MarketingScience 19 366ndash380
Verhaeghe A and Kfir R (2002) Managing innovationin a knowledge intensive technology organisation(KITO) RampD Management 32 409ndash417
Verworn B (2002) The fuzzy front end of productdevelopment an exploratory study In Proceedings9th International Product Development ManagementConference Sophia Antipolis France pp 863ndash878Brussels European Institute for Advanced Studiesin Management
Veryzer RW (1998) Discontinuous innovation andthe new product development process Journal ofProduct Innovation Management 15 304ndash321
Volberda HW (1996) Towards the flexible formhow to remain vital in hypercompetitive environ-ments Organizational Science 7 359ndash374
Von Hippel E (1986) Lead users a source of novelproduct concepts Management Science 32 791ndash805
Von Zedtwitz M (2002) Organizational learningthrough post-project reviews in RampD RampD Man-agement 32 255ndash268
Voss C Chase R and Roth A (1999) Internationalservice study Decision Line May 4ndash7
Vyakarnam S and Adams RJ (2001) Institutionalbarriers to enterprise support an empirical studyEnvironment and Planning C Government andPolicy 19 335ndash353
Werner BM and Souder WE (1997) MeasuringRampD performance ndash state of the art Research-Technology Management 40 34ndash42
West MA (1990) The social psychology of innova-tion in groups In West MA and Farr JL (eds)Innovation and Creativity at Work Psychologicaland Organizational Strategies Chichester UKJohn Wiley pp 309ndash333
West MA and Anderson NR (1996) Innovation intop management teams Journal of Applied Psychol-ogy 81 680ndash693
White A (2002) Enabling factors in the front end ofthe innovation process In Proceedings 9thInternational Product Development ManagementConference Sophia Antipolis France BrusselsEuropean Institute for Advanced Studies inManagement pp 879ndash887
Wolfe RA (1994) Organizational innovationreview critique and suggested research direc-tions Journal of Management Studies 31 405ndash431
Yoon E and Lilien GL (1985) A new productlaunch-time decision model Journal of ProductInnovation Management 3 134ndash144
Zahra SA and George G (2002) Absorptivecapacity a review reconceptualization and
copy Blackwell Publishing Ltd 2006 47
March 2006
extension Academy of Management Review 27185
Zaltman G Duncan R and Holbek J (1973) Inno-vations and Organizations New York John Wiley
Zien KA and Buckler SA (1997) From experiencedreams to market crafting a culture of innovationJournal of Product Innovation Management 14274ndash287
Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
copy Blackwell Publishing Ltd 2006 33
March 2006
dedicated project leader inter-functional com-munication and co-operation qualificationsand know-how of the project leader teamautonomy and responsibility for the processAnd these factors are echoed throughout theliterature Rothwell (1992) refers to them aslsquocorporate conditionsrsquo Chiesa et al (1996)lsquoenabling processesrsquo and OrsquoReilly and Tushman(1997) lsquonorms for innovation and changersquoHowever despite their perceived importancethere is little guidance on how to measurethem
Volberda (1996) developed a conceptualmodel of alternative flexible organizationalforms that are argued to initiate or respondbetter to different types of competition Yet inspite of its importance there is relatively littleevidence of extant measures of flexibility inthe literature Rothwell (1992) and Ekvall(1996) propose a range of foci for measures oforganizational and production flexibility suchas lsquocorporate flexibility and responsiveness tochangersquo Coughlan (1994) considers the flexi-bility of resource allocation Several measuresof personnel flexibility are evident such aslsquothe adaptiveness of RampD personnel to tech-nology changesrsquo (Lee et al 1996) and lsquothewillingness to try new procedures and toexperiment with change so as to improve asituation or a processrsquo (Abbey and Dickson1983) At the level of the firm Liao et al(2003) introduce a similar construct ndash lsquoorgan-izational responsivenessrsquo
Organizational complexity the amount ofspecialization and task differentiation report-edly have a positive relationship (Damanpour1996) though Wolfe (1994) argues that it mayfavour initiation at the expense of implemen-tation Administrative intensity that is theratio of managers to total employees favoursadministrative innovation (Damanpour 19911996) but possibly at the cost of other pro-duct or technological innovations (Doughertyand Hardy 1996) Centralization the concen-tration of decision-making authority at the topof the organizational hierarchy and formaliza-tion the degree of emphasis on following rulesand procedures in role performance have both
been shown to have a negative impact on organ-izational innovation (Burns and Stalker 1961Damanpour 1991) Indeed rigidity in rulesand procedures may prohibit organizationaldecision-makers from seeking new sources ofinformation (Vyakarnam and Adams 2001)
Underlying the concept of the workplaceenvironment are issues related to the manage-ment of human resources and the creation ofa culture or climate in which individuals per-ceive innovation to be a desired and supportedorganizational objective There has been con-siderable empirical work on organizationalclimates supportive of the innovation processand several measurement instruments havebeen developed which Mathisen and Einarsen(2004) review The Team Climate Inventory(TCI) (Anderson and West 1996 1998) andthe KEYS instrument for assessing the workenvironment for creativity (Amabile et al 1996)have been found to be robust and rigorous
The TCI has been applied and validated inseveral studies (Agrell and Gustafson 1994Anderson and West 1998 Kivimaumlki et al1997 West and Anderson 1996) Replicationstudies using the TCI have found it canexplain a large part of the variance in teamsrsquoinnovative performance (Agrell and Gustafson1994) The TCI is based around four mainfactors participative safety (how participativeis the team in decision-making proceduresand how psychologically secure do teammembers feel about proposing new andimproved ways of doing things) support forinnovation (the degree of practical support forinnovation attempts contrasted with the rheto-ric of professed support by senior manage-ment) vision (how clearly defined sharedattainable and valued are the teamrsquos objectivesand vision) and task orientation (the com-mitment of the team to achieve the highestpossible standards of task performance includ-ing the use of constructive progress monitor-ing procedures) (Anderson and West 1996)Kivimaumlki et al (1997) suggested a fifth factorlsquointeraction frequencyrsquo relating to the regularityof contact and communication within theproject team
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Innovation management measurement A review
There is general agreement about theimportance of individual and group autonomyin the innovation process (Amabile 1998)Zien and Buckler (1997) emphasize the needfor freedom to experiment and the creation ofsafe havens without which innovation out-come might be constrained Measures ofautonomy mix both qualitative and quantita-tive approaches For example lsquothe degree offreedom personnel have in day-to-day operat-ing decisions such as when to work andhow to solve job problems including freedomfrom constant evaluation and close supervi-sionrsquo (Abbey and Dickson 1983) or lsquopercent-age of RampD portfolio with explicit businessunit andor corporate business managementsign-offrsquo (Tipping and Zeffren 1995) Addition-ally several authors have proposed generalmeasures of autonomy such as lsquofreedom tomake operating decisionsrsquo (Abbey and Dick-son 1983) or lsquodegree of empowermentrsquo (deLeede et al 1999 Tipping and Zeffren1995)
Morale and motivation are dimensions ofthe innovative organization that can be meas-ured as they pertain to individuals ndash lsquotheextent to which personnel are well rewardedrsquo(Abbey and Dickson 1983) to groups ndash lsquoourreward system is more group-based thanindividual-basedrsquo (Parthasarthy and Hammond2002) and to the organization as a whole ndashlsquothe degree to which the organization attemptsto excelrsquo (Abbey and Dickson 1983) Aspectsof morale and motivation that have beenmeasured include trust (Miller and Friesen1982) and job satisfaction which has beenmeasured by Keller (1986) on a 20-item scale
Organizational culture may include a sharedvision and it has been argued that the clearerthe vision the more effective it is as a facilitatorof innovation as it enables focused develop-ment of new ideas that can be assessed moreprecisely (West 1990) Pinto and Prescott(1988) found that the only factor to have pre-dictive power in terms of potential for successat all stages of the innovation process (con-ception planning execution and termination)was having a clearly stated missionvision
while West (1990) contends that the quality ofinnovation is partly a function of visionKeller (1986) adopts Kirtonrsquos (1976) 32-itemadopterndashinnovator inventory to determineindividual and team orientation to innovationVision is operationalized in the team climateinventory (cf Agrell and Gustafson 1994Anderson and West 1996 1998 West andAnderson 1996) and is deconstructed into aseries of sub-dimensions such as clarity shared-ness attainability and value with regard toteam objectives
Another aspect of culture is the propensityto take risks Saleh and Wang (1993) describethis as a willingness to confront risky oppor-tunities and tolerate failure and learn fromdoing so rather than recklessly gamblingSimilarly West (1990) demonstrated thathigher levels of participative safety facilitateinnovation Participative safety is non-judgmental supportive and characterized bysocio-emotional cohesiveness The attractive-ness of the organization as a place to workand undertake innovative activities is used byGeisler (1995) as an indicator of the climatefor innovation measured by numbers of can-didates applying for positions and the ageprofile of scientists and engineers Keller(1986) offers a slightly different perspectiveon participative safety with the constructlsquogroup cohesivenessrsquo which he operational-izes using an established five-item measure
This review has described a wide variety ofmeasures proposed for organizational cultureand structure Unlike some other aspects ofinnovation management this area has receivedextensive measurement attention HoweverHolbek (1988) argues that innovating organi-zations must adopt contrasting structures andclimates as they move from the initiation tothe implementation stages of innovationChesborough and Teece (1996) and Burns andStalker (1961) argue that there is a relation-ship between organizational design and typeof innovation It is a significant gap in innova-tion measurement that there appears to be nomeasures that adequately capture or articulatethis sense of structural shift
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March 2006
Portfolio Management
The importance of portfolio management tosuccessful product innovation has recentlyemerged as a key theme in the literature Itis important because of the rapidity at whichresources are consumed in the innovationprocess and the need for these to be managed(Cebon and Newton 1999) The effectivenesswith which an organization manages its RampDportfolio is often a key determinant of itscompetitive advantage (Bard et al 1988) Thefocus of portfolio management is on makingstrategic technological and resource choicesthat govern project selection and the futureshape of the organization (Cooper et al 1999)The problems of allocation of resources evalu-ation selection and termination of projects inachieving the optimal portfolio have beenextensively investigated The models all havethe objective of devising means to allocateresources to projects to obtain the optimalbalance in the product development portfoliothat is arriving at a portfolio that optimizesthe trade-off between returns and risks
The process of selecting innovation projectsrequires evaluation and resource allocationunder uncertain conditions It is argued that asystematic process guided by clear selectioncriteria can help optimize the use of limitedresources and enhance an organizationrsquoscompetitive position (Hall and Nauda 1990)The earliest models used return on investmentas the primary decision criteria (Bard et al 1988)Following this increasingly sophisticatedmathematical tools were developed to resolvewhat Schmidt and Freeland (1992) describe asthe constrained optimization problem that isto maximize the output (according to specifiedcriteria) from a subset of available inputsThese project selection models lsquohave beenvirtually ignored by industryrsquo (Schmidt andFreeland 1992 190) Part of the reason forthis is the inherent complexity of some ofthese models but also that they fail to takeinto account organizational decision andcommunication processes More recentlymodels have tried to take account of these
more qualitative factors involved in decisionprocesses
Scoring models require respondents tospecify the merit of any project proposalaccording to a set of a priori criteria whichmay be objective or subjective (Hall andNauda 1990) Economic and benefit modelsattempt to compute the cost benefit or finan-cial risk of pursuing a specific project whilemathematical programming approaches seekto optimize some objective function(s) subjectto specified resource constraints Algorithmsof varying complexity exist requiring moni-toring and significant data entry and whilemany are conceptually attractive surveys donot show widespread utilization of thesetechniques (Hall and Nauda 1990) Theseapproaches are all based on financial meas-ures such as internal rate of return net presentvalue and return on investment At the otherend of the spectrum qualitative approachessuch as peer review and mental checklistsrely on subjective perceptions and measuresof portfolio balance (Cooper et al 2001Henriksen and Traynor 1999)
Cooper et al (1999) find that best performersuse explicit formalized tools and consist-ently apply them to all projects considered tobelong to a portfolio A series of measures canbe identified that evaluate the whole portfolioof innovation projects to answer questionssuch as lsquois it balanced in terms of quantity ofshort- and long term-projectsrsquo and lsquois there abalance between high and low risk projectsand large and small projectsrsquo (Brenner 1994Cooper et al 2001) Another set seeks to iden-tify the extent to which portfolio evaluationmeasures are formalized within the organiza-tionrsquos processes (Cebon and Newton 1999Chiesa et al 1996 Farrukh et al 2000 Millerand Friesen 1982) Yet another approach is toview project evaluation and selection as anorganizational capability and attempt to deter-mine a level of proficiency (Szakonyi 1994)Finally there is a series of post hoc measuresof the appropriateness of project selections inthe light of results and alignment with busi-ness objectives (Lee et al 1996)
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Innovation management measurement A review
Project Management
Project management is concerned with theprocesses that turn the inputs into a marketa-ble innovation The innovation process iscomplex comprising a myriad of events andactivities some of which can be identified as asequence and some of which occur concur-rently and it is clearly possible that innova-tion processes will differ to some degreeacross organizations and even within organi-zations on a project-by-project basis Havingan efficient process that is able to manage theambiguity of the innovation is universally agreedto be critical to innovation (Globe et al 1973)
Various approaches have been taken tomodelling innovation processes as a series ofevents (Zaltman et al 1973) as a social interac-tion (Voss et al 1999) as a series of transactions(Nelson and Winter 1982) and as a process ofcommunication (Farrukh et al 2000) The his-tory of project management research is partlycharacterized by a debate regarding the extentto which events and activities within the processoccur in linearly sequential discrete identifiablestages (Zaltman et al 1973) or whether eventsare more disorganized (King 1992) or evenchaotic (Koput 1997) However despite thesedifferent viewpoints there are a number ofcommon elements that can be summarized asthe major components of the innovation projectmanagement These are project efficiencytools communications and collaboration
Several studies make efforts to measureproject management efficiency mostly in theform of comparisons between budget and actual(project costs project duration revenue fore-casting) Another measure of project manage-ment success is speed Innovation speed hasbeen positively correlated with product qual-ity or the degree to which it satisfies customerrequirements measures include speed (Hauserand Zettelmeyer 1997) performance againstschedule (Chiesa and Masella 1994) and dura-tion of the process (Cebon and Newton 1999)
To achieve efficiency it is widely recom-mended that organizations seeking to innovateshould establish formal processes for innovat-
ing and make use of tools and techniquesthat may facilitate innovative endeavours Thestage-gate process (Cooper 1990) is possiblythe most familiar of these but other method-ologies for innovation project managementexist including Phased Development Productand Cycle-time Excellence and Total Design(see Jenkins et al (1997) for a discussion)These methodologies have in common theseparation of the product development processinto structured and discrete stages which eachhave milestones in the form of quality controlcheckpoints at which stopgo decisions are madewith regard to the progress of the project Thesehighly structured approaches to the manage-ment of the innovation process began toemerge in the 1990s (Veryzer 1998) The useof structured tools and processes can bemeasured by project process evaluations forexample the use of a formal problem-findingproblem-solving cycle (Bessant 2003) the useof formal post-launch evaluation procedures(Atuahene-Gima 1995) or the use of certifiedprocesses (Chiesa et al 1996) These rathergeneral process measures have been supple-mented by measures of the use of specificinstruments and tools such as interactiveCAD or CAM (Maylor 2001) or the use ofcomputer-integrated manufacturing processes(Parthasarthy and Hammond 2002) but wenote that these measures betray the technologicaland NPD heritage that underpins many of theinnovation measures identified in this reviewEquivalents for service industry public ornot-for-profit sector innovations are somewhatlacking in the literature and constitute aresearch gap
Communications are important in projectmanagement Damanpour (1991) demon-strated the existence of a positive relationshipbetween internal communication and innova-tion Internal communication facilitates thedispersion of ideas within an organizationincreases the diversity and also contributes tothe team lsquoclimatersquo Communication can bemeasured by various integration mechanismseg committees numbers of meetings andcontacts (Damanpour 1991) There are also
copy Blackwell Publishing Ltd 2006 37
March 2006
measures of external communications whichtend to focus on whether communication istaking place the level at which it occurs andwith whom (Cebon and Newton 1999 Leeet al 1996 Rothwell 1992 Souitaris 2002)These measures of internal and external com-munication in the literature are based on bothsubjective evaluations and objective frequencycounts Subjective measures include lsquowe alwaysconsult supplierscustomers on new productideasrsquo (Parthasarthy and Hammond 2002) andlsquodegree of organization members involved andparticipating in extra-organizational professionalactivitiesrsquo (Damanpour 1991) Objective countsinclude (Damanpour 1991) lsquoextent of commu-nication amongst organizational units or groupsmeasured by various integrating mechanismssuch as numbers of committees and frequencyof meetingsrsquo (Anderson and West 1998)lsquofrequency of formal meetings concerningnew ideasrsquo (Souitaris 2002 Szakonyi 1994)lsquohow well do the technical and finance peoplecommunicate with one anotherrsquo
It is widely recognized that collaboratingwith suppliers (Bessant 2003) and customers(von Hippel 1986) can also make a significantcontribution to the innovation processMeasures of collaborative working includethe use of guest engineers (Maylor 2001) thepercentage of projects in co-operation withthird parties (Kerssens-van Drongelen andBilderbeek 1999) and the extent to whichdecision-making at top levels is characterizedby cross-functional discussions (Miller andFriesen 1982) In addition Jassawalla andSashittal (1999) identify some characteristicsof internal collaboration ie that teams arecharacterized by their mindfulness levels ofat-stakeness synergy and transparency butthey do not suggest how these aspects mightbe measured which constitutes a furtherresearch gap
Commercialization
Commercialization can be considered to bethe second of the two phases in Zaltman et alrsquos(1973) conceptualization of the innovation
process that is lsquoimplementationrsquo This canmean taking an innovation to market (Chakra-vorti 2004) but may also include convincingproduction managers to adopt a series of newtechniques available to them (Single andSpurgeon 1996) Indeed the successful intro-duction of new products and services intomarkets is important for the survival andgrowth of organizations Kelm et al (1995)regard commercialization as a transitionalphase in which the organization becomesless reliant on its technological capabilities(important during the activities of initiation)but more dependent on market dynamicsCommercialization is concerned with makingthe innovative process or product a commer-cial success it includes issues such as market-ing sales distribution and joint venturesWhile technical capabilities are important forthe early stages of the innovation process anddevelopment activities for the launch andimplementation stage it is marketing capabili-ties (market investigation market testingpromotion etc) that are significant (Calantoneand di Benedetto 1988 Globe et al 1973)Verhaeghe and Kfir (2002) consider aspectsof commercialization under the headings ofmarket analysis and monitoring reaching thecustomer and market planning
Firm-level measures of the launch or com-mercialization process appear to be relativelythin In their description of the RampD processBalachandra and Brockhoff (1995) character-ize the commercialization stage as requiringlsquobig bucksrsquo market reviews and organiza-tional commitment Most measures appear tobe not much more sophisticated than thisMeasures are frequently restricted to numbersof products launched in a given period (egYoon and Lilien 1985) There is thoughsome focus on market analysis and monitor-ing (Verhaeghe and Kfir 2002) Song andParry (1996) employ a set of measures oflaunch proficiency (salesforce distributionaland promotional support) that directly addressthe lsquoadequacyrsquo of the organizationrsquos facilities inthese areas as do Avlonitis et al (2001) Andthere is a limited mention of the commercial
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Innovation management measurement A review
intentions of an organizationrsquos competitors(Calantone and di Benedetto 1988) Thethemes of proficiency of personnel in this area(eg Atuahene-Gima 1995 Cebon and New-ton 1999) of adherence to a commercializa-tion schedule (eg Griffin and Page 1993) andof formal post-launch reviews (Atuahene-Gima 1995 von Zedtwitz 2002) can also befound in the literature
Even in the work that addresses post-project reviews very little attention is directedtowards measuring innovation launch orcommercialization However this comes aslittle surprise as Hultink et al (2000) recentlyobserved that little work has been done in thearea perhaps because at least in the innova-tion literature launch activities appear to beconsidered the domain of other specialistsparticularly marketers and the process is seenas separate from innovation In their studythey investigated launch decisions associatedwith success for consumer and business-to-business products Much of the literature thatconsiders launch and commercialization doesso from the viewpoint of the adopter andassesses rates of adoption and diffusion ofinnovations over time across populations(Kessler and Chakrabarti 1996 Van DenBulte 2000)
The area of commercialization appears tobe the least developed of the issues involvedin innovation management This is a huge gapbecause without this last step the previoussteps of assembling inputs project manage-ment etc will not result in a commerciallyviable outcome for the firm We believe thatthis area of innovation is in urgent need offurther development from both theory andmeasurement viewpoints
Discussion
Innovation management measurement is acritical discipline for both academics andpractitioners The capacity of organizations toinnovate is determined by multiple factors thatrelate both to their own internal organizationand to their market environment (Rothwell
et al 1974) and the task of generating andthen converting ideas into usable and market-able products requires high levels of inter-functional co-ordination and integration Thispaper opened with the general observationthat innovation measurement does not appearto take place routinely within managementpractice and that where it does it tends tofocus on output measures Further from therelatively small number of empirical studiesof measurement in practice measurement ofinnovation management appears to be under-taken infrequently in an ad hoc fashion andrelies on dated unbalanced or under-specifiedmodels of the innovation management phe-nomenon This suggests that a large part ofthe contemporary conceptualization of theinnovation management phenomenon is over-looked in practitionersrsquo measurement prac-tices and consequently that opportunities forthe more efficient and effective managementof the innovation process are not realizedSome possible reasons for this state of affairsare failure of academics to communicate ade-quately inconsistency inaccessibility andcomplexity of measures and poor synthesisand packaging
Following a review and synthesis of theliterature we proposed a seven-dimensionalconceptualization of the innovation manage-ment phenomenon and applied it to an exam-ination of the measurement problem Throughthe application of this framework to their ownparticular context it is suggested that practi-tioners will be able to conduct an evaluationof their own innovation management activityidentify gaps weaknesses or deficiencies andalso improvement potential Further it ishoped that organizations applying the frame-work will be able to tease out areas whereinnovation is only nominally adopted in theirprocesses and identify areas where attentionand resources might be focused
From the perspective of its management itis no longer sufficient to treat innovation as alinear process where resources are channelledat one end from which emerges a new prod-uct or process The measurement framework
copy Blackwell Publishing Ltd 2006 39
March 2006
presented in Table 2 shows the breadth andvariety of elements of innovation managementthat ideally need to be measured There havebeen several studies that have investigated thelimitations of various approaches to measure-ment (eg Werner and Souder 1997) and ofspecific measures (eg Trajtenberg 1990) asthey relate to the practice of innovation Thechoice of an appropriate RampD measurementmetric depends on the userrsquos needs in terms ofcomprehensiveness of measurement type ofRampD being measured available data andamount of effort the user can afford to allocateto the exercise Nonetheless the commonciting across various papers of the measuresnoted in the innovation management frame-work presented here suggests that a base setof innovation management measures isimplicitly present in the literature eventhough they may be fragmented in appearanceand presentation By pulling together theinnovation management framework fromdiverse sources this paper aims to bring suchissues into the open and identify relevantresearch gaps Table 2 can be viewed as thebasis for a balanced scorecard (Kaplan andNorton 1992) for innovation managementthat is as a balanced set of areas that need tobe measured in order to gain insight into anorganizationrsquos holistic ability to manage inno-vation Such multidimensional approaches tomeasurement have been found in other areasof management to be an improvement on sim-ple one-dimensional measures and to be ableto capture both short- and long-term aspectsof value creation in the firm (Phelps 2004)
We have identified a large number of meas-ures and approaches in a variety of innovationmanagement areas and we have constructed ageneric set of innovation management meas-urement areas to act as a framework for bal-anced measurement However in several ofthese areas measurement gaps have beenidentified These gaps are of two types valid-ity gaps and omission gaps Validity gaps arisewhere there is insufficient evidence that pro-posed measures actually do capture drivers oroutputs of innovation management for example
we have noted the objections to counts ofpatents or increasing expenditure on RampD beingused as measures of innovative organizationsSimilarly there is an absence of evidence thatthe large number of subjective perceptions ofinnovation management practices proposed(lsquowe do Arsquo lsquowe are good at Brsquo) actually relateto innovation management performance
Omission gaps occur where the importanceof an aspect of innovation management is sup-ported in the literature but measures for thisaspect are lacking Omission gaps are particu-larly prevalent in the elements of innovationmanagement such as knowledge managementinnovation strategy and commercializationthat do not feature strongly in the literature ontechnological and manufacturing-based inno-vation Another area traditionally not givenmuch emphasis in this literature is organiza-tion and culture which fortunately is bettertreated by the organizational behaviour litera-ture where a number of measures have beendeveloped Much of the current state of meas-urement practice can be traced back to the dis-ciplinersquos early manufacturing RampD and NPDfocus While product innovation is undoubt-edly important it is only one dimension of anorganizationrsquos innovation agenda Process andorganizational innovations are recognizedtoo as critical for competitiveness yet theseperspectives are inadequately represented inmeasurement terms
General areas of omission in this fieldrelate to an over-reliance on financial meas-ures rather than process measures for exam-ple the use of financial measures of portfoliooptimization but an absence of portfoliocapability measures a similar reliance oncodified knowledge such as patents to theexclusion of more intangible measures suchas tacit knowledge the measurement of levelsof resources or activities with no indication ofwhat an optimal level would be the measure-ment of drivers of innovation without meas-ures of whether these drivers are aligned witheach other and with firm strategy measures ofpresence that do not measure quality (eg theuse of dichotomous (yesno) measures that do
40 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
not indicate how well an action is implementedand measures of the presence of leadership(such as champions) but not of quality ofleadership) a general absence of measuresfor important properties of organizationalstructures such as flexibility and a lack ofmeasures of the match between structure andenvironment a technological and NPD bias toproject management measures and a relativeabsence of measures for service sectors apaucity of measures for internal communica-tions and a general lack of measures forcommercialization management ndash in particulararound marketing and sales capabilities forinnovative products and services All thesegaps provide the potential for further researchin innovation management measurement
The absence of an accepted framework ofinnovation management measures leads notonly to the gaps identified above but also toother problems in the literature One is that itis frequently unclear whether or not the met-rics used are of the researchersrsquo own devisingdrawn from the literature or are what are usedby the organizations being studied Nor is italways clear when metrics are devised orrecommended whether they are intended foruse in a research capacity or for managementtasks Further the measures proposed in theliterature often seem to be proposed abstractlywith little consideration given to the use ofmeasures as a management tool in the day-to-day context of managing innovation In theabsence of a comprehensive framework forinnovation management measurement organ-izations will inevitably resort to ad hoc andpartial metrics which can encourage wastefulpractice (eg measuring innovation managementcapability according to annual RampD spend)We hope that the framework constructed inthis paper will be useful in the constructionof comprehensive measures of innovationmanagement
Acknowledgements
The research reported here was supported bya grant from Cranfield School of Management
the authors gratefully acknowledge this supportFurther the authors are grateful to the editorsand two anonymous reviewers for their helpfuland insightful comments on previous versionsof this paper
Note
1 Corresponding author Telephone +44 (0) 207594 9137 e-mail radamsimperialacuk
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Innovation management measurement A review
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Glaser BG and Strauss AL (1967) The Discoveryof Grounded Theory Strategies for QualitativeResearch London Aldine
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Griliches Z (1990) Patent statistics as economicindicators a survey Journal of Economic Litera-ture 28 1661ndash1707
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Henriksen AD and Traynor AJ (1999) A practicalRampD project-selection scoring tool IEEE Trans-actions on Engineering Management 46 158ndash170
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Hull R Coombs R and Peltu M (2000) Know-ledge management practices for innovation anaudit tool for improvement International Journalof Technology Management 20 633ndash656
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Jassawalla AR and Sashittal HC (1999) Buildingcollaborative cross-functional new product teamsAcademy of Management Executive 13 50ndash63
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Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
34 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
There is general agreement about theimportance of individual and group autonomyin the innovation process (Amabile 1998)Zien and Buckler (1997) emphasize the needfor freedom to experiment and the creation ofsafe havens without which innovation out-come might be constrained Measures ofautonomy mix both qualitative and quantita-tive approaches For example lsquothe degree offreedom personnel have in day-to-day operat-ing decisions such as when to work andhow to solve job problems including freedomfrom constant evaluation and close supervi-sionrsquo (Abbey and Dickson 1983) or lsquopercent-age of RampD portfolio with explicit businessunit andor corporate business managementsign-offrsquo (Tipping and Zeffren 1995) Addition-ally several authors have proposed generalmeasures of autonomy such as lsquofreedom tomake operating decisionsrsquo (Abbey and Dick-son 1983) or lsquodegree of empowermentrsquo (deLeede et al 1999 Tipping and Zeffren1995)
Morale and motivation are dimensions ofthe innovative organization that can be meas-ured as they pertain to individuals ndash lsquotheextent to which personnel are well rewardedrsquo(Abbey and Dickson 1983) to groups ndash lsquoourreward system is more group-based thanindividual-basedrsquo (Parthasarthy and Hammond2002) and to the organization as a whole ndashlsquothe degree to which the organization attemptsto excelrsquo (Abbey and Dickson 1983) Aspectsof morale and motivation that have beenmeasured include trust (Miller and Friesen1982) and job satisfaction which has beenmeasured by Keller (1986) on a 20-item scale
Organizational culture may include a sharedvision and it has been argued that the clearerthe vision the more effective it is as a facilitatorof innovation as it enables focused develop-ment of new ideas that can be assessed moreprecisely (West 1990) Pinto and Prescott(1988) found that the only factor to have pre-dictive power in terms of potential for successat all stages of the innovation process (con-ception planning execution and termination)was having a clearly stated missionvision
while West (1990) contends that the quality ofinnovation is partly a function of visionKeller (1986) adopts Kirtonrsquos (1976) 32-itemadopterndashinnovator inventory to determineindividual and team orientation to innovationVision is operationalized in the team climateinventory (cf Agrell and Gustafson 1994Anderson and West 1996 1998 West andAnderson 1996) and is deconstructed into aseries of sub-dimensions such as clarity shared-ness attainability and value with regard toteam objectives
Another aspect of culture is the propensityto take risks Saleh and Wang (1993) describethis as a willingness to confront risky oppor-tunities and tolerate failure and learn fromdoing so rather than recklessly gamblingSimilarly West (1990) demonstrated thathigher levels of participative safety facilitateinnovation Participative safety is non-judgmental supportive and characterized bysocio-emotional cohesiveness The attractive-ness of the organization as a place to workand undertake innovative activities is used byGeisler (1995) as an indicator of the climatefor innovation measured by numbers of can-didates applying for positions and the ageprofile of scientists and engineers Keller(1986) offers a slightly different perspectiveon participative safety with the constructlsquogroup cohesivenessrsquo which he operational-izes using an established five-item measure
This review has described a wide variety ofmeasures proposed for organizational cultureand structure Unlike some other aspects ofinnovation management this area has receivedextensive measurement attention HoweverHolbek (1988) argues that innovating organi-zations must adopt contrasting structures andclimates as they move from the initiation tothe implementation stages of innovationChesborough and Teece (1996) and Burns andStalker (1961) argue that there is a relation-ship between organizational design and typeof innovation It is a significant gap in innova-tion measurement that there appears to be nomeasures that adequately capture or articulatethis sense of structural shift
copy Blackwell Publishing Ltd 2006 35
March 2006
Portfolio Management
The importance of portfolio management tosuccessful product innovation has recentlyemerged as a key theme in the literature Itis important because of the rapidity at whichresources are consumed in the innovationprocess and the need for these to be managed(Cebon and Newton 1999) The effectivenesswith which an organization manages its RampDportfolio is often a key determinant of itscompetitive advantage (Bard et al 1988) Thefocus of portfolio management is on makingstrategic technological and resource choicesthat govern project selection and the futureshape of the organization (Cooper et al 1999)The problems of allocation of resources evalu-ation selection and termination of projects inachieving the optimal portfolio have beenextensively investigated The models all havethe objective of devising means to allocateresources to projects to obtain the optimalbalance in the product development portfoliothat is arriving at a portfolio that optimizesthe trade-off between returns and risks
The process of selecting innovation projectsrequires evaluation and resource allocationunder uncertain conditions It is argued that asystematic process guided by clear selectioncriteria can help optimize the use of limitedresources and enhance an organizationrsquoscompetitive position (Hall and Nauda 1990)The earliest models used return on investmentas the primary decision criteria (Bard et al 1988)Following this increasingly sophisticatedmathematical tools were developed to resolvewhat Schmidt and Freeland (1992) describe asthe constrained optimization problem that isto maximize the output (according to specifiedcriteria) from a subset of available inputsThese project selection models lsquohave beenvirtually ignored by industryrsquo (Schmidt andFreeland 1992 190) Part of the reason forthis is the inherent complexity of some ofthese models but also that they fail to takeinto account organizational decision andcommunication processes More recentlymodels have tried to take account of these
more qualitative factors involved in decisionprocesses
Scoring models require respondents tospecify the merit of any project proposalaccording to a set of a priori criteria whichmay be objective or subjective (Hall andNauda 1990) Economic and benefit modelsattempt to compute the cost benefit or finan-cial risk of pursuing a specific project whilemathematical programming approaches seekto optimize some objective function(s) subjectto specified resource constraints Algorithmsof varying complexity exist requiring moni-toring and significant data entry and whilemany are conceptually attractive surveys donot show widespread utilization of thesetechniques (Hall and Nauda 1990) Theseapproaches are all based on financial meas-ures such as internal rate of return net presentvalue and return on investment At the otherend of the spectrum qualitative approachessuch as peer review and mental checklistsrely on subjective perceptions and measuresof portfolio balance (Cooper et al 2001Henriksen and Traynor 1999)
Cooper et al (1999) find that best performersuse explicit formalized tools and consist-ently apply them to all projects considered tobelong to a portfolio A series of measures canbe identified that evaluate the whole portfolioof innovation projects to answer questionssuch as lsquois it balanced in terms of quantity ofshort- and long term-projectsrsquo and lsquois there abalance between high and low risk projectsand large and small projectsrsquo (Brenner 1994Cooper et al 2001) Another set seeks to iden-tify the extent to which portfolio evaluationmeasures are formalized within the organiza-tionrsquos processes (Cebon and Newton 1999Chiesa et al 1996 Farrukh et al 2000 Millerand Friesen 1982) Yet another approach is toview project evaluation and selection as anorganizational capability and attempt to deter-mine a level of proficiency (Szakonyi 1994)Finally there is a series of post hoc measuresof the appropriateness of project selections inthe light of results and alignment with busi-ness objectives (Lee et al 1996)
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Innovation management measurement A review
Project Management
Project management is concerned with theprocesses that turn the inputs into a marketa-ble innovation The innovation process iscomplex comprising a myriad of events andactivities some of which can be identified as asequence and some of which occur concur-rently and it is clearly possible that innova-tion processes will differ to some degreeacross organizations and even within organi-zations on a project-by-project basis Havingan efficient process that is able to manage theambiguity of the innovation is universally agreedto be critical to innovation (Globe et al 1973)
Various approaches have been taken tomodelling innovation processes as a series ofevents (Zaltman et al 1973) as a social interac-tion (Voss et al 1999) as a series of transactions(Nelson and Winter 1982) and as a process ofcommunication (Farrukh et al 2000) The his-tory of project management research is partlycharacterized by a debate regarding the extentto which events and activities within the processoccur in linearly sequential discrete identifiablestages (Zaltman et al 1973) or whether eventsare more disorganized (King 1992) or evenchaotic (Koput 1997) However despite thesedifferent viewpoints there are a number ofcommon elements that can be summarized asthe major components of the innovation projectmanagement These are project efficiencytools communications and collaboration
Several studies make efforts to measureproject management efficiency mostly in theform of comparisons between budget and actual(project costs project duration revenue fore-casting) Another measure of project manage-ment success is speed Innovation speed hasbeen positively correlated with product qual-ity or the degree to which it satisfies customerrequirements measures include speed (Hauserand Zettelmeyer 1997) performance againstschedule (Chiesa and Masella 1994) and dura-tion of the process (Cebon and Newton 1999)
To achieve efficiency it is widely recom-mended that organizations seeking to innovateshould establish formal processes for innovat-
ing and make use of tools and techniquesthat may facilitate innovative endeavours Thestage-gate process (Cooper 1990) is possiblythe most familiar of these but other method-ologies for innovation project managementexist including Phased Development Productand Cycle-time Excellence and Total Design(see Jenkins et al (1997) for a discussion)These methodologies have in common theseparation of the product development processinto structured and discrete stages which eachhave milestones in the form of quality controlcheckpoints at which stopgo decisions are madewith regard to the progress of the project Thesehighly structured approaches to the manage-ment of the innovation process began toemerge in the 1990s (Veryzer 1998) The useof structured tools and processes can bemeasured by project process evaluations forexample the use of a formal problem-findingproblem-solving cycle (Bessant 2003) the useof formal post-launch evaluation procedures(Atuahene-Gima 1995) or the use of certifiedprocesses (Chiesa et al 1996) These rathergeneral process measures have been supple-mented by measures of the use of specificinstruments and tools such as interactiveCAD or CAM (Maylor 2001) or the use ofcomputer-integrated manufacturing processes(Parthasarthy and Hammond 2002) but wenote that these measures betray the technologicaland NPD heritage that underpins many of theinnovation measures identified in this reviewEquivalents for service industry public ornot-for-profit sector innovations are somewhatlacking in the literature and constitute aresearch gap
Communications are important in projectmanagement Damanpour (1991) demon-strated the existence of a positive relationshipbetween internal communication and innova-tion Internal communication facilitates thedispersion of ideas within an organizationincreases the diversity and also contributes tothe team lsquoclimatersquo Communication can bemeasured by various integration mechanismseg committees numbers of meetings andcontacts (Damanpour 1991) There are also
copy Blackwell Publishing Ltd 2006 37
March 2006
measures of external communications whichtend to focus on whether communication istaking place the level at which it occurs andwith whom (Cebon and Newton 1999 Leeet al 1996 Rothwell 1992 Souitaris 2002)These measures of internal and external com-munication in the literature are based on bothsubjective evaluations and objective frequencycounts Subjective measures include lsquowe alwaysconsult supplierscustomers on new productideasrsquo (Parthasarthy and Hammond 2002) andlsquodegree of organization members involved andparticipating in extra-organizational professionalactivitiesrsquo (Damanpour 1991) Objective countsinclude (Damanpour 1991) lsquoextent of commu-nication amongst organizational units or groupsmeasured by various integrating mechanismssuch as numbers of committees and frequencyof meetingsrsquo (Anderson and West 1998)lsquofrequency of formal meetings concerningnew ideasrsquo (Souitaris 2002 Szakonyi 1994)lsquohow well do the technical and finance peoplecommunicate with one anotherrsquo
It is widely recognized that collaboratingwith suppliers (Bessant 2003) and customers(von Hippel 1986) can also make a significantcontribution to the innovation processMeasures of collaborative working includethe use of guest engineers (Maylor 2001) thepercentage of projects in co-operation withthird parties (Kerssens-van Drongelen andBilderbeek 1999) and the extent to whichdecision-making at top levels is characterizedby cross-functional discussions (Miller andFriesen 1982) In addition Jassawalla andSashittal (1999) identify some characteristicsof internal collaboration ie that teams arecharacterized by their mindfulness levels ofat-stakeness synergy and transparency butthey do not suggest how these aspects mightbe measured which constitutes a furtherresearch gap
Commercialization
Commercialization can be considered to bethe second of the two phases in Zaltman et alrsquos(1973) conceptualization of the innovation
process that is lsquoimplementationrsquo This canmean taking an innovation to market (Chakra-vorti 2004) but may also include convincingproduction managers to adopt a series of newtechniques available to them (Single andSpurgeon 1996) Indeed the successful intro-duction of new products and services intomarkets is important for the survival andgrowth of organizations Kelm et al (1995)regard commercialization as a transitionalphase in which the organization becomesless reliant on its technological capabilities(important during the activities of initiation)but more dependent on market dynamicsCommercialization is concerned with makingthe innovative process or product a commer-cial success it includes issues such as market-ing sales distribution and joint venturesWhile technical capabilities are important forthe early stages of the innovation process anddevelopment activities for the launch andimplementation stage it is marketing capabili-ties (market investigation market testingpromotion etc) that are significant (Calantoneand di Benedetto 1988 Globe et al 1973)Verhaeghe and Kfir (2002) consider aspectsof commercialization under the headings ofmarket analysis and monitoring reaching thecustomer and market planning
Firm-level measures of the launch or com-mercialization process appear to be relativelythin In their description of the RampD processBalachandra and Brockhoff (1995) character-ize the commercialization stage as requiringlsquobig bucksrsquo market reviews and organiza-tional commitment Most measures appear tobe not much more sophisticated than thisMeasures are frequently restricted to numbersof products launched in a given period (egYoon and Lilien 1985) There is thoughsome focus on market analysis and monitor-ing (Verhaeghe and Kfir 2002) Song andParry (1996) employ a set of measures oflaunch proficiency (salesforce distributionaland promotional support) that directly addressthe lsquoadequacyrsquo of the organizationrsquos facilities inthese areas as do Avlonitis et al (2001) Andthere is a limited mention of the commercial
38 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
intentions of an organizationrsquos competitors(Calantone and di Benedetto 1988) Thethemes of proficiency of personnel in this area(eg Atuahene-Gima 1995 Cebon and New-ton 1999) of adherence to a commercializa-tion schedule (eg Griffin and Page 1993) andof formal post-launch reviews (Atuahene-Gima 1995 von Zedtwitz 2002) can also befound in the literature
Even in the work that addresses post-project reviews very little attention is directedtowards measuring innovation launch orcommercialization However this comes aslittle surprise as Hultink et al (2000) recentlyobserved that little work has been done in thearea perhaps because at least in the innova-tion literature launch activities appear to beconsidered the domain of other specialistsparticularly marketers and the process is seenas separate from innovation In their studythey investigated launch decisions associatedwith success for consumer and business-to-business products Much of the literature thatconsiders launch and commercialization doesso from the viewpoint of the adopter andassesses rates of adoption and diffusion ofinnovations over time across populations(Kessler and Chakrabarti 1996 Van DenBulte 2000)
The area of commercialization appears tobe the least developed of the issues involvedin innovation management This is a huge gapbecause without this last step the previoussteps of assembling inputs project manage-ment etc will not result in a commerciallyviable outcome for the firm We believe thatthis area of innovation is in urgent need offurther development from both theory andmeasurement viewpoints
Discussion
Innovation management measurement is acritical discipline for both academics andpractitioners The capacity of organizations toinnovate is determined by multiple factors thatrelate both to their own internal organizationand to their market environment (Rothwell
et al 1974) and the task of generating andthen converting ideas into usable and market-able products requires high levels of inter-functional co-ordination and integration Thispaper opened with the general observationthat innovation measurement does not appearto take place routinely within managementpractice and that where it does it tends tofocus on output measures Further from therelatively small number of empirical studiesof measurement in practice measurement ofinnovation management appears to be under-taken infrequently in an ad hoc fashion andrelies on dated unbalanced or under-specifiedmodels of the innovation management phe-nomenon This suggests that a large part ofthe contemporary conceptualization of theinnovation management phenomenon is over-looked in practitionersrsquo measurement prac-tices and consequently that opportunities forthe more efficient and effective managementof the innovation process are not realizedSome possible reasons for this state of affairsare failure of academics to communicate ade-quately inconsistency inaccessibility andcomplexity of measures and poor synthesisand packaging
Following a review and synthesis of theliterature we proposed a seven-dimensionalconceptualization of the innovation manage-ment phenomenon and applied it to an exam-ination of the measurement problem Throughthe application of this framework to their ownparticular context it is suggested that practi-tioners will be able to conduct an evaluationof their own innovation management activityidentify gaps weaknesses or deficiencies andalso improvement potential Further it ishoped that organizations applying the frame-work will be able to tease out areas whereinnovation is only nominally adopted in theirprocesses and identify areas where attentionand resources might be focused
From the perspective of its management itis no longer sufficient to treat innovation as alinear process where resources are channelledat one end from which emerges a new prod-uct or process The measurement framework
copy Blackwell Publishing Ltd 2006 39
March 2006
presented in Table 2 shows the breadth andvariety of elements of innovation managementthat ideally need to be measured There havebeen several studies that have investigated thelimitations of various approaches to measure-ment (eg Werner and Souder 1997) and ofspecific measures (eg Trajtenberg 1990) asthey relate to the practice of innovation Thechoice of an appropriate RampD measurementmetric depends on the userrsquos needs in terms ofcomprehensiveness of measurement type ofRampD being measured available data andamount of effort the user can afford to allocateto the exercise Nonetheless the commonciting across various papers of the measuresnoted in the innovation management frame-work presented here suggests that a base setof innovation management measures isimplicitly present in the literature eventhough they may be fragmented in appearanceand presentation By pulling together theinnovation management framework fromdiverse sources this paper aims to bring suchissues into the open and identify relevantresearch gaps Table 2 can be viewed as thebasis for a balanced scorecard (Kaplan andNorton 1992) for innovation managementthat is as a balanced set of areas that need tobe measured in order to gain insight into anorganizationrsquos holistic ability to manage inno-vation Such multidimensional approaches tomeasurement have been found in other areasof management to be an improvement on sim-ple one-dimensional measures and to be ableto capture both short- and long-term aspectsof value creation in the firm (Phelps 2004)
We have identified a large number of meas-ures and approaches in a variety of innovationmanagement areas and we have constructed ageneric set of innovation management meas-urement areas to act as a framework for bal-anced measurement However in several ofthese areas measurement gaps have beenidentified These gaps are of two types valid-ity gaps and omission gaps Validity gaps arisewhere there is insufficient evidence that pro-posed measures actually do capture drivers oroutputs of innovation management for example
we have noted the objections to counts ofpatents or increasing expenditure on RampD beingused as measures of innovative organizationsSimilarly there is an absence of evidence thatthe large number of subjective perceptions ofinnovation management practices proposed(lsquowe do Arsquo lsquowe are good at Brsquo) actually relateto innovation management performance
Omission gaps occur where the importanceof an aspect of innovation management is sup-ported in the literature but measures for thisaspect are lacking Omission gaps are particu-larly prevalent in the elements of innovationmanagement such as knowledge managementinnovation strategy and commercializationthat do not feature strongly in the literature ontechnological and manufacturing-based inno-vation Another area traditionally not givenmuch emphasis in this literature is organiza-tion and culture which fortunately is bettertreated by the organizational behaviour litera-ture where a number of measures have beendeveloped Much of the current state of meas-urement practice can be traced back to the dis-ciplinersquos early manufacturing RampD and NPDfocus While product innovation is undoubt-edly important it is only one dimension of anorganizationrsquos innovation agenda Process andorganizational innovations are recognizedtoo as critical for competitiveness yet theseperspectives are inadequately represented inmeasurement terms
General areas of omission in this fieldrelate to an over-reliance on financial meas-ures rather than process measures for exam-ple the use of financial measures of portfoliooptimization but an absence of portfoliocapability measures a similar reliance oncodified knowledge such as patents to theexclusion of more intangible measures suchas tacit knowledge the measurement of levelsof resources or activities with no indication ofwhat an optimal level would be the measure-ment of drivers of innovation without meas-ures of whether these drivers are aligned witheach other and with firm strategy measures ofpresence that do not measure quality (eg theuse of dichotomous (yesno) measures that do
40 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
not indicate how well an action is implementedand measures of the presence of leadership(such as champions) but not of quality ofleadership) a general absence of measuresfor important properties of organizationalstructures such as flexibility and a lack ofmeasures of the match between structure andenvironment a technological and NPD bias toproject management measures and a relativeabsence of measures for service sectors apaucity of measures for internal communica-tions and a general lack of measures forcommercialization management ndash in particulararound marketing and sales capabilities forinnovative products and services All thesegaps provide the potential for further researchin innovation management measurement
The absence of an accepted framework ofinnovation management measures leads notonly to the gaps identified above but also toother problems in the literature One is that itis frequently unclear whether or not the met-rics used are of the researchersrsquo own devisingdrawn from the literature or are what are usedby the organizations being studied Nor is italways clear when metrics are devised orrecommended whether they are intended foruse in a research capacity or for managementtasks Further the measures proposed in theliterature often seem to be proposed abstractlywith little consideration given to the use ofmeasures as a management tool in the day-to-day context of managing innovation In theabsence of a comprehensive framework forinnovation management measurement organ-izations will inevitably resort to ad hoc andpartial metrics which can encourage wastefulpractice (eg measuring innovation managementcapability according to annual RampD spend)We hope that the framework constructed inthis paper will be useful in the constructionof comprehensive measures of innovationmanagement
Acknowledgements
The research reported here was supported bya grant from Cranfield School of Management
the authors gratefully acknowledge this supportFurther the authors are grateful to the editorsand two anonymous reviewers for their helpfuland insightful comments on previous versionsof this paper
Note
1 Corresponding author Telephone +44 (0) 207594 9137 e-mail radamsimperialacuk
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Alegre-Vidal J Lapiedra-Alcami R and Chiva-Gomez R (2004) Linking operations strategy andproduct innovation an empirical study of Spanishceramic tile producers Research Policy 33 829ndash839
Amabile TM (1998) How to kill creativity HarvardBusiness Review SeptemberndashOctober 77ndash87
Amabile TM Conti R Coon H Lazenby J andHerron M (1996) Assessing the work environ-ment for creativity Academy of Management Jour-nal 39 1154ndash1184
Ambrosini V and Bowman C (2001) Tacit know-ledge some suggestions for operationalisationJournal of Management Studies 38 811ndash829
Anderson N and West MA (1996) The teamclimate inventory development of the TCI and itsapplications in teambuilding for innovativenessEuropean Journal of Work and Organizational Psy-chology 5 53ndash66
Anderson NR and West MA (1998) Measuringclimate for work group innovation developmentand validation of the team climate inventory Jour-nal of Organizational Behavior 19 235ndash258
Atuahene-Gima K (1995) An exploratory analysisof the input of market orientation on new productperformance a contingency approach Journal ofProduct Innovation Management 12 275ndash293
Avlonitis GJ Papastathopoulou PG and Gounaris SP(2001) An empirically-based typology of productinnovativeness for new financial services success
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March 2006
and failure scenarios Journal of Product Innova-tion Management 18 324ndash342
Balachandra R and Brockhoff K (1995) Are RampDproject termination factors universal Research-Technology Management 38 31ndash36
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Barclay I (1992) The new product developmentprocess part 2 Improving the process of new prod-uct development RampD Management 4 307ndash317
Bard JF Balachandra R and Kaufmann PE(1988) An interactive approach to RampD projectselection and termination IEEE Transactions onEngineering Management 35 139ndash146
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Bess G (1998) A first stage organization life cyclestudy of six emerging nonprofit organizations inLos Angeles Administration in Social Work 2235ndash52
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Bessant J and Francis D (1997) Implementing thenew product development process Technovation17 189ndash197
Blackler F (1995) Knowledge knowledge work andorganizations an overview and interpretationOrganization Studies 16 1021ndash1046
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Brenner MS (1994) Practical RampD project prioriti-zation Research Technology Management 37 38ndash43
Brown MG and Svenson RA (1988) MeasuringRampD productivity Research-Technology Manage-ment JulyndashAugust 11ndash15
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Burns TR and Stalker GM (1961) The Manage-ment of Innovation London Tavistock
Calantone RJ and di Benedetto CA (1988) Anintegrative model of the new product developmentprocess an empirical validation Journal of Prod-uct Innovation Management 5 201ndash215
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Chakravorti B (2004) The new rules for bringinginnovations to market Harvard Business Review82 58ndash67
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Chiesa V Coughlan P and Voss A (1996) Devel-opment of a technical innovation audit Journal ofProduct Innovation Management 13 105ndash136
Cohen WM and Levinthal DA (1990) Absorptivecapacity a new perspective on learning and inno-vation Administrative Science Quarterly 35 128ndash152
Cooper RG (1979a) The dimensions of industrialnew product success and failure Journal of Mar-keting 43 93ndash103
Cooper RG (1979b) Identifying industrial newproduct success Project NewProd Industrial Mar-keting Management 8 124ndash135
Cooper RG (1984) The strategyndashperformance linkin product innovation RampD Management 14 247ndash259
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Innovation management measurement A review
Cooper RG (1990) Stage-gate systems a new toolfor managing new products Business Horizons 3344ndash56
Cooper RG and Kleinschmidt EJ (1990) Newproduct success factors a comparison of lsquokillsrsquoversus successes and failures RampD Management20 47ndash64
Cooper RG and Kleinschmidt EJ (1995) Bench-marking the firmrsquos critical success factors in newproduct development Journal of Product Innova-tion Management 12 374ndash391
Cooper RG Edgett SJ and Kleinschmidt EJ(1999) New product portfolio management prac-tices and performance Journal of Product Innova-tion Management 16 333ndash351
Cooper RG Edgett SJ and Kleinschmidt EJ(2001) Portfolio Management for New Products2nd edition Cambridge MA Perseus
Cooper RG Edgett SJ and Kleinschmidt EJ (2004)Benchmarking best NPD practices Research-Technology Management 47 50ndash59
Cordero R (1990) The measurement of innovationperformance in the firm an overview ResearchPolicy 19 185ndash192
Cormican K and OrsquoSullivan D (2004) Auditingbest practice for effective product innovationmanagement Technovation 24 819ndash829
Coughlan P Chiesa V and Voss C (1994) Evalu-ating leadership as an enabler of innovation InProceedings 2nd International Product Develop-ment Management Conference GothenburgSweden 30ndash31 May Brussels European Institutefor Advanced Studies in Management
Covin JG and Slevin DP (1989) Strategic manage-ment of small firms in hostile and benign environ-ments Strategic Management Journal 10 75ndash87
Daft R (1978) A dual-core model of organizationalinnovation Academy of Management Journal 21193ndash210
Damanpour F (1991) Organizational innovation ameta-analysis of effects of determinants and mod-erators Academy of Management Journal 34 555ndash590
Damanpour F (1996) Organizational complexity andinnovation developing and testing multiple contin-gency models Management Science 42 693ndash716
Davis MC (1998) Knowledge management Infor-mation Strategy The Executiversquos Journal 15 11ndash22
De Brentani U (1991) Success factors in developingnew business services European Journal of Mar-keting 25 33ndash60
De Leede J Nijhof AH and Fisscher OA (1999)The myth of self managing teams a reflection onthe allocation of responsibilities between individu-als teams and the organisation Journal of BusinessEthics 21 203ndash215
Deeds DL (2001) The role of RampD intensitytechnical development and absorptive capacity increating entrepreneurial wealth in high technologystart-ups Journal of Engineering and TechnologyManagement 18 29ndash47
Denyer D and Neely A (2004) Introduction to spe-cial issue innovation and productivity performancein the UK International Journal of ManagementReviews 45 131ndash135
Di Benedetto CA (1996) Identifying the key suc-cess factors in new product launch Journal ofProduct Innovation Management 16 530ndash544
Dodgson M and Hinze S (2000) Indicators used tomeasure the innovation process defects and possi-ble remedies Research Evaluation 8 101ndash114
Dougherty D and Cohen M (1995) Product inno-vation in mature firms In Bowman E and KogutB (eds) Redesigning the Firm New York OxfordUniversity Press
Dougherty D and Hardy C (1996) Sustained prod-uct innovation in large mature organizations over-coming innovation-to-organization problemsAcademy of Management Journal 39 1120ndash1153
DTI (1998) An Audience With Innovation Innovationin Management London Department of Trade andIndustry
Dyer B and Song XM (1998) Innovation strategyand sanctioned conflict a new edge in innovationJournal of Product Innovation Management 15505ndash519
Ekvall G (1996) Organizational climate for creativ-ity and innovation European Journal of Work andOrganizational Psychology 5 105ndash123
Ernst H (2002) Success factors of new productdevelopment a review of the empirical literatureInternational Journal of Management Reviews 41ndash40
Farrukh C Phaal R Probert D Gregory M andWright J (2000) Developing a process for therelative valuation of RampD programmes RampDManagement 30 43ndash53
Frenkel A Maital S and Grupp H (2000) Meas-uring dynamic technical change a technometricapproach International Journal of TechnologyManagement 20 429ndash441
Galunic DC and Rodan S (1998) Resource recom-binations and the firm knowledge structures and
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March 2006
the potential for Schumpeterian innovationStrategic Management Journal 19 1193ndash1201
Geisler E (1995) An integrated costndashperformancemodel of research-and-development evaluationOmega ndash International Journal of ManagementScience 23 281ndash294
Glaser BG and Strauss AL (1967) The Discoveryof Grounded Theory Strategies for QualitativeResearch London Aldine
Globe S Levy GW and Schwartz CM (1973)Key factors and events in the innovation processResearch Management 16 8ndash15
Goffin K and Pfeiffer R (1999) Innovation Man-agement in UK and German Manufacturing Com-panies London Anglo-German Foundation for theStudy of Industrial Society
Grant RM (1991) The resource-based theory ofcompetitive advantage implications for strategyformulation California Management Review 33114ndash135
Greve HR (2003) A behavioral theory of RampDexpenditures and innovations evidence fromshipbuilding Academy of Management Journal 46685ndash702
Griffin A (1997) PDMA research on new productdevelopment practices updating trends and bench-marking best practices Journal of Product Innova-tion Management 14 429ndash458
Griffin A and Page AL (1993) An interim reporton measuring product development success andfailure Journal of Product Innovation Manage-ment 10 291ndash308
Griliches Z (1990) Patent statistics as economicindicators a survey Journal of Economic Litera-ture 28 1661ndash1707
Hall DL and Nauda A (1990) An interactiveapproach for selecting IRampD projects IEEE Trans-actions on Engineering Management 37 126ndash133
Hauser JR and Zettelmeyer F (1997) Metrics toevaluate RDampE Research-Technology Manage-ment 40 32ndash38
Henriksen AD and Traynor AJ (1999) A practicalRampD project-selection scoring tool IEEE Trans-actions on Engineering Management 46 158ndash170
Hipp C and Grupp H (2005) Innovation in theservice sector the demand for service specific-innovation measurement concepts and typologiesResearch Policy 34 517ndash535
Holbek J (1988) The innovation design dilemmasome notes on its relevance and solutions InGroslashnhaug K and Kaufmann G (eds) Innovation
A Cross-Disciplinary Perspective NorwegianUniversity Press pp 253ndash277
Hope Hailey V (2001) Breaking the mould Innova-tion as a strategy for corporate renewal Inter-national Journal of Human Resource Management12 1126ndash1140
Hull R Coombs R and Peltu M (2000) Know-ledge management practices for innovation anaudit tool for improvement International Journalof Technology Management 20 633ndash656
Hultink EJ Hart S Robben HSJ and Griffin A(2000) Launch decisions and new product successan empirical comparison of consumer and indus-trial products Journal of Product Innovation Man-agement 17 5ndash23
Jassawalla AR and Sashittal HC (1999) Buildingcollaborative cross-functional new product teamsAcademy of Management Executive 13 50ndash63
Jenkins S Forbes S Durrani TS and BanerjeeSK (1997) Managing the product developmentprocess 1 An assessment International Journal ofTechnology Management 13 359ndash378
Kaplan RS and Norton DP (1992) The balancedscorecard ndash measures that drive performance HarvardBusiness Review JanuaryndashFebruary 71ndash79
Keller RT (1986) Predictors of performance ofproject groups in RampD organizations Academy ofManagement Journal 29 715ndash726
Kelm KM Narayanan VK and Pinches GE (1995)Shareholder value creation during research-and-development innovation and commercialization stagesAcademy of Management Journal 38 770ndash786
Kerssens-van Drongelen IC and Bilderbeek J(1999) RampD performance measurement morethan choosing a set of metrics RampD Management29 35ndash46
Kerssens-van Drongelen IC and de Weerd-Nederhof PC (1999) The use of performancemeasurement tools for balancing short- and long-term NPD performance International Journal ofInnovation Management 3 397ndash426
Kessler EH and Chakrabarti AK (1996) Innova-tion speed a conceptual model of context anteced-ents and outcomes Academy of ManagementReview 21 1143ndash1191
Kim B and Oh H (2002) An effective RampD per-formance measurement system survey of KoreanRampD researchers Omega ndash International Journalof Management Science 30 19ndash31
Kim J and Wilemon D (2002) Strategic issues inmanaging innovationrsquos fuzzy front-end EuropeanJournal of Innovation Management 5 27ndash39
44 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Kimberly JR (1981) Managerial innovation InNystrom PC and Starbuck WH (eds) Handbookof Organizational Design Vol 1 New YorkOxford University Press pp 84ndash104
King N (1992) Modelling the innovation process anempirical comparison of approaches Journal ofOccupational and Organizational Psychology 6589ndash100
Kirton MJ (1976) Adaptors and innovators adescription and measure Journal of Applied Psy-chology 61 622ndash629
Kivimaumlki M Kuk G Elovainio M Thomson LKalliomaumlki-Levanto T and Heikkilauml A (1997)The team climate inventory (TCI) ndash four or fivefactors Testing the structure of TCI in samples oflow and high complexity jobs Journal of Occupa-tional and Organizational Psychology 70 375ndash389
Kivimaumlki M Lansisalmi H Elovainio M Heik-kila A Lindstrom K Harisalo R Sipila K andPuolimatka L (2000) Communication as a deter-minant of organizational innovation RampD Man-agement 30 33ndash42
Kleinknecht A (1987) Measuring RampD in smallfirms how much are we missing Journal of Indus-trial Economics 36 253ndash256
Koen P Ajamian G Burkart R Clamen ADavidson J DrsquoAmore R Elkins C Herald KIncorvia M Johnson A Karol R Seibert RSlavejkov A and Wagner K (2001) Providingclarity and a common language to the lsquofuzzy front endrsquoResearch-Technology Management 44 46ndash55
Koput K (1997) A chaotic model of innovativesearch some answers many questions Organiza-tion Science 8 528ndash542
Lawrence PR and Lorsch JW (1967) Organizationand Environment Harvard MA Harvard Univer-sity Press
Lee M Son B and Lee H (1996) Measuring RampDeffectiveness in Korean companies Research-Technology Management 39 28ndash31
Leonard D and Sensiper S (1998) The role of tacitknowledge in group innovation California Man-agement Review 40 112ndash132
Leseure M Birdi K Bauer J Denyer D andNeely A (2004) Adoption of Promising PracticeA Systematic Review of the Literature LondonAdvanced Institute of Management Research
Li HY and Atuahene-Gima K (2001) Productinnovation strategy and the performance of newtechnology ventures in China Academy of Man-agement Journal 44 1123ndash1134
Liao J Welsch H and Stoica M (2003) Organiza-tional absorptive capacity and responsivenessan empirical investigation of growth-orientedSMEs Entrepreneurship Theory and Practice 2863ndash86
Linstone HA and Turoff M (eds) (2002) The Del-phi Method Techniques and Applications httpwwwisnjitedupubsdelphibook
Loch C Stein L and Terwiesch C (1996) Meas-uring development performance in the electronicsindustry Journal of Product Innovation Manage-ment 13 3ndash20
Mathisen GE and Einarsen S (2004) A review ofinstruments assessing creative and innovative envi-ronments within organizations Creativity ResearchJournal 16 119ndash140
Maylor H (2001) Assessing the relationshipbetween practice changes and process improve-ment in new product development Omega ndashInternational Journal of Management Science 2985ndash96
McAdam RMS (1999) The process of knowledgemanagement within organizations a critical assess-ment of both theory and practice Knowledge andProcess Management 6 101ndash113
McManus RJ Wilson S Delaney BC Fitzmau-rice DA Hyde CJ Tobias RS Jowett S andHobbs FDR (1998) Review of the usefulness ofcontacting other experts when conducting a litera-ture search for systematic reviews British MedicalJournal 317 1562ndash1563
Miles RE and Snow CC (1978) Organization StrategyStructure and Process New York McGraw-Hill
Miller D and Friesen PH (1982) Innovation inconservative and entrepreneurial firms two modelsof strategic momentum Strategic ManagementJournal 3 1ndash24
Mintzberg H (1978) Patterns in strategy formationManagement Science 24 934ndash948
Mitroff I (1987) Business Not As Usual Rethinkingour Individual Corporate and Industrial Strategiesfor Global Competition London Jossey-Bass
Moenaert RK De Meyer A Souder WE andDeschoolmeester D (1995) RampDMarketing com-munication during the fuzzy front-end IEEETransactions on Engineering Management 42243ndash257
Neely A and Hii J (1998) Innovation and BusinessPerformance A Literature Review Report producedfor Government Office for the Eastern RegionCambridge The Judge Institute of ManagementStudies University of Cambridge
copy Blackwell Publishing Ltd 2006 45
March 2006
Nelson R and Winter G (1982) An EvolutionaryTheory of Economic Change Cambridge MABelknap Press
Nohria N and Gulati R (1996) Is slack good or badfor innovation Academy of Management Journal39 1245ndash1264
Nonaka I (1991) The knowledge-creating companyHarvard Business Review NovemberndashDecember96ndash104
Nonaka I and Takeuchi H (1995) The KnowledgeCreating Company How Japanese CompaniesCreate the Dynamics of Innovation New YorkOxford University Press
OrsquoBrien JP (2003) The capital structure implica-tions of pursuing a strategy of innovation StrategicManagement Journal 24 415ndash431
OrsquoReilly CA and Tushman ML (1997) Using cul-ture for strategic advantage promoting innovationthrough social control In Tushman ML andAnderson P (eds) Managing Strategic Innovationand Change A Collection of Readings New YorkOxford University Press pp 200ndash216
Oliver N Dewberry E and Dostaler I (1999) Newproduct development performance and practice aninternational benchmarking study in the consumerelectronics industry In Proceedings 6th Inter-national Product Development Management Confer-ence Cambridge UK Brussels European Institutefor Advanced Studies in Management
Pakes A and Griliches Z (1980) Patents and RampDat the firm level a first report Economic Letters 5377ndash381
Parthasarthy R and Hammond J (2002) Productinnovation input and outcome moderating effectsof the innovation process Journal of Engineeringand Technology Management 19 75ndash91
Patterson F (2003) Innovation potential indicatorAvailable at wwwoppcouk
Phelps B (2004) Smart Business Metrics MeasureWhat Really Counts and Manage What Makes theDifference London FT-Prentice Hall
Pinto JK and Prescott JE (1988) Changes in crit-ical success factors over the stages in the projectlife cycle Journal of Management 14 5ndash18
Pitt M and Clarke K (1999) Competing on compe-tence a knowledge perspective on the managementof strategic innovation Technology Analysis andStrategic Management 11 301ndash316
Pittaway L Robertson M Munir K Denyer D andNeely A (2004) Networking and Innovation in theUK a Systematic Review of the Literature LondonAdvanced Institute of Management Research
Porter ME and Ketels CHM (2003) UK Compet-itiveness Moving to the Next Stage DTI Econom-ics Paper No 3 URN 03899
Pugh DS Hickson DJ Hinings CR and TurnerC (1969) The context of organization structuresAdministrative Science Quarterly 14 91ndash114
Ramanujam V and Mensch GO (1985) Improvingthe strategyndashinnovation link Journal of ProductInnovation Management 2 213ndash223
Richard O McMillan A Chadwick K and DwyerS (2003) Employing an innovation strategy inracially diverse workforces ndash effects on firm per-formance Group amp Organization Management 28107ndash126
Rickards T (1991) Innovation and creativity treesand pathways RampD Management 21 97ndash108
Rochford L (1991) Generating and screening newproduct ideas Industrial Marketing Management20 287ndash296
Rothwell R (1992) Successful industrial innovationcritical factors for the 1990s RampD Management22 221ndash239
Rothwell R Freeman C Horseley A JervisVTP Robertson AB and Townsend J (1974)SAPPHO updated ndash Project SAPPHO phase IIResearch Policy 3 258ndash291
Saleh SD and Wang CK (1993) The managementof innovation ndash strategy structure and organiza-tional climate IEEE Transactions on EngineeringManagement 40 14ndash21
Schmidt RL and Freeland JR (1992) Recentprogress in modelling RampD project-selection proc-esses IEEE Transactions on Engineering Manage-ment 39 189ndash201
Schroeder RG Van de Ven AH Scudder GDand Polley D (1989) The development of innova-tion ideas In Van de Ven AH Angle HL andPoole M (eds) Research on the Management ofInnovation The Minnesota Studies New YorkHarper amp Row pp 107ndash133
Scott S and Bruce R (1994) Determinants ofinnovative behaviour a path model of individualinnovation Academy of Management Journal 37580ndash607
Shane S Venkataraman S and MacMillan I (1995)Cultural differences in innovation championingstrategies Journal of Management 21 931ndash952
Shepard HA (1967) Innovation-resisting and inno-vation producing organizations Journal of Busi-ness 40 470ndash477
Shin J and McClomb GE (1998) Top executiveleadership and organizational innovation an
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Innovation management measurement A review
empirical investigation of nonprofit human serviceorganizations (HSOS) Administration in SocialWork 22 1ndash21
Single AW and Spurgeon WM (1996) Creatingand commercializing innovation inside a skunkworks Research-Technology Management 39 38ndash41
Song XM and Parry ME (1996) What separatesJapanese new product winners from losersJournal of Product Innovation Management 13422ndash439
Souitaris V (2002) Firm-specific competenciesdetermining technological innovation a survey inGreece RampD Management 32 61ndash77
Stock GN Greis NP and Fischer WA (2001)Absorptive capacity and new product developmentJournal of High Technology ManagementResearch 12 77ndash91
Sundbo J (1997) Management of innovation inservices Service Industries Journal 17 432ndash455
Sveiby KE (1997) The New Organizational WealthManaging and Measuring Knowledge-BasedAssets San Francisco CA Berrett-Koehler
Szakonyi R (1994) Measuring RampD effectiveness IResearch-Technology Management 37 27ndash32
Thompson L (2003) Improving the creativity oforganizational work groups Academy of Manage-ment Executive 17 96ndash109
Tidd J Bessant J and Pavitt K (1997) ManagingInnovation Integrating Technological Market andOrganizational Change Chichester UK JohnWiley
Tipping J and Zeffren E (1995) Assessing thevalue of your technology ResearchndashTechnologyManagement 38 22ndash40
Trajtenberg M (1990) A penny for your quotes ndashpatent citations and the value of innovations RandJournal of Economics 21 172ndash187
Tranfield D Denyer D and Smart P (2003)Towards a methodology for developing evidence-informed management knowledge by means of asystematic review British Journal of Management14 207ndash222
Tsai W (2001) Knowledge transfer in intraorganiza-tional networks effects of network position andabsorptive capacity on business unit innovation andperformance Academy of Management Journal44 996ndash1004
Van Den Bulte C (2000) New product diffusionacceleration measurement and analysis MarketingScience 19 366ndash380
Verhaeghe A and Kfir R (2002) Managing innovationin a knowledge intensive technology organisation(KITO) RampD Management 32 409ndash417
Verworn B (2002) The fuzzy front end of productdevelopment an exploratory study In Proceedings9th International Product Development ManagementConference Sophia Antipolis France pp 863ndash878Brussels European Institute for Advanced Studiesin Management
Veryzer RW (1998) Discontinuous innovation andthe new product development process Journal ofProduct Innovation Management 15 304ndash321
Volberda HW (1996) Towards the flexible formhow to remain vital in hypercompetitive environ-ments Organizational Science 7 359ndash374
Von Hippel E (1986) Lead users a source of novelproduct concepts Management Science 32 791ndash805
Von Zedtwitz M (2002) Organizational learningthrough post-project reviews in RampD RampD Man-agement 32 255ndash268
Voss C Chase R and Roth A (1999) Internationalservice study Decision Line May 4ndash7
Vyakarnam S and Adams RJ (2001) Institutionalbarriers to enterprise support an empirical studyEnvironment and Planning C Government andPolicy 19 335ndash353
Werner BM and Souder WE (1997) MeasuringRampD performance ndash state of the art Research-Technology Management 40 34ndash42
West MA (1990) The social psychology of innova-tion in groups In West MA and Farr JL (eds)Innovation and Creativity at Work Psychologicaland Organizational Strategies Chichester UKJohn Wiley pp 309ndash333
West MA and Anderson NR (1996) Innovation intop management teams Journal of Applied Psychol-ogy 81 680ndash693
White A (2002) Enabling factors in the front end ofthe innovation process In Proceedings 9thInternational Product Development ManagementConference Sophia Antipolis France BrusselsEuropean Institute for Advanced Studies inManagement pp 879ndash887
Wolfe RA (1994) Organizational innovationreview critique and suggested research direc-tions Journal of Management Studies 31 405ndash431
Yoon E and Lilien GL (1985) A new productlaunch-time decision model Journal of ProductInnovation Management 3 134ndash144
Zahra SA and George G (2002) Absorptivecapacity a review reconceptualization and
copy Blackwell Publishing Ltd 2006 47
March 2006
extension Academy of Management Review 27185
Zaltman G Duncan R and Holbek J (1973) Inno-vations and Organizations New York John Wiley
Zien KA and Buckler SA (1997) From experiencedreams to market crafting a culture of innovationJournal of Product Innovation Management 14274ndash287
Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
copy Blackwell Publishing Ltd 2006 35
March 2006
Portfolio Management
The importance of portfolio management tosuccessful product innovation has recentlyemerged as a key theme in the literature Itis important because of the rapidity at whichresources are consumed in the innovationprocess and the need for these to be managed(Cebon and Newton 1999) The effectivenesswith which an organization manages its RampDportfolio is often a key determinant of itscompetitive advantage (Bard et al 1988) Thefocus of portfolio management is on makingstrategic technological and resource choicesthat govern project selection and the futureshape of the organization (Cooper et al 1999)The problems of allocation of resources evalu-ation selection and termination of projects inachieving the optimal portfolio have beenextensively investigated The models all havethe objective of devising means to allocateresources to projects to obtain the optimalbalance in the product development portfoliothat is arriving at a portfolio that optimizesthe trade-off between returns and risks
The process of selecting innovation projectsrequires evaluation and resource allocationunder uncertain conditions It is argued that asystematic process guided by clear selectioncriteria can help optimize the use of limitedresources and enhance an organizationrsquoscompetitive position (Hall and Nauda 1990)The earliest models used return on investmentas the primary decision criteria (Bard et al 1988)Following this increasingly sophisticatedmathematical tools were developed to resolvewhat Schmidt and Freeland (1992) describe asthe constrained optimization problem that isto maximize the output (according to specifiedcriteria) from a subset of available inputsThese project selection models lsquohave beenvirtually ignored by industryrsquo (Schmidt andFreeland 1992 190) Part of the reason forthis is the inherent complexity of some ofthese models but also that they fail to takeinto account organizational decision andcommunication processes More recentlymodels have tried to take account of these
more qualitative factors involved in decisionprocesses
Scoring models require respondents tospecify the merit of any project proposalaccording to a set of a priori criteria whichmay be objective or subjective (Hall andNauda 1990) Economic and benefit modelsattempt to compute the cost benefit or finan-cial risk of pursuing a specific project whilemathematical programming approaches seekto optimize some objective function(s) subjectto specified resource constraints Algorithmsof varying complexity exist requiring moni-toring and significant data entry and whilemany are conceptually attractive surveys donot show widespread utilization of thesetechniques (Hall and Nauda 1990) Theseapproaches are all based on financial meas-ures such as internal rate of return net presentvalue and return on investment At the otherend of the spectrum qualitative approachessuch as peer review and mental checklistsrely on subjective perceptions and measuresof portfolio balance (Cooper et al 2001Henriksen and Traynor 1999)
Cooper et al (1999) find that best performersuse explicit formalized tools and consist-ently apply them to all projects considered tobelong to a portfolio A series of measures canbe identified that evaluate the whole portfolioof innovation projects to answer questionssuch as lsquois it balanced in terms of quantity ofshort- and long term-projectsrsquo and lsquois there abalance between high and low risk projectsand large and small projectsrsquo (Brenner 1994Cooper et al 2001) Another set seeks to iden-tify the extent to which portfolio evaluationmeasures are formalized within the organiza-tionrsquos processes (Cebon and Newton 1999Chiesa et al 1996 Farrukh et al 2000 Millerand Friesen 1982) Yet another approach is toview project evaluation and selection as anorganizational capability and attempt to deter-mine a level of proficiency (Szakonyi 1994)Finally there is a series of post hoc measuresof the appropriateness of project selections inthe light of results and alignment with busi-ness objectives (Lee et al 1996)
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Innovation management measurement A review
Project Management
Project management is concerned with theprocesses that turn the inputs into a marketa-ble innovation The innovation process iscomplex comprising a myriad of events andactivities some of which can be identified as asequence and some of which occur concur-rently and it is clearly possible that innova-tion processes will differ to some degreeacross organizations and even within organi-zations on a project-by-project basis Havingan efficient process that is able to manage theambiguity of the innovation is universally agreedto be critical to innovation (Globe et al 1973)
Various approaches have been taken tomodelling innovation processes as a series ofevents (Zaltman et al 1973) as a social interac-tion (Voss et al 1999) as a series of transactions(Nelson and Winter 1982) and as a process ofcommunication (Farrukh et al 2000) The his-tory of project management research is partlycharacterized by a debate regarding the extentto which events and activities within the processoccur in linearly sequential discrete identifiablestages (Zaltman et al 1973) or whether eventsare more disorganized (King 1992) or evenchaotic (Koput 1997) However despite thesedifferent viewpoints there are a number ofcommon elements that can be summarized asthe major components of the innovation projectmanagement These are project efficiencytools communications and collaboration
Several studies make efforts to measureproject management efficiency mostly in theform of comparisons between budget and actual(project costs project duration revenue fore-casting) Another measure of project manage-ment success is speed Innovation speed hasbeen positively correlated with product qual-ity or the degree to which it satisfies customerrequirements measures include speed (Hauserand Zettelmeyer 1997) performance againstschedule (Chiesa and Masella 1994) and dura-tion of the process (Cebon and Newton 1999)
To achieve efficiency it is widely recom-mended that organizations seeking to innovateshould establish formal processes for innovat-
ing and make use of tools and techniquesthat may facilitate innovative endeavours Thestage-gate process (Cooper 1990) is possiblythe most familiar of these but other method-ologies for innovation project managementexist including Phased Development Productand Cycle-time Excellence and Total Design(see Jenkins et al (1997) for a discussion)These methodologies have in common theseparation of the product development processinto structured and discrete stages which eachhave milestones in the form of quality controlcheckpoints at which stopgo decisions are madewith regard to the progress of the project Thesehighly structured approaches to the manage-ment of the innovation process began toemerge in the 1990s (Veryzer 1998) The useof structured tools and processes can bemeasured by project process evaluations forexample the use of a formal problem-findingproblem-solving cycle (Bessant 2003) the useof formal post-launch evaluation procedures(Atuahene-Gima 1995) or the use of certifiedprocesses (Chiesa et al 1996) These rathergeneral process measures have been supple-mented by measures of the use of specificinstruments and tools such as interactiveCAD or CAM (Maylor 2001) or the use ofcomputer-integrated manufacturing processes(Parthasarthy and Hammond 2002) but wenote that these measures betray the technologicaland NPD heritage that underpins many of theinnovation measures identified in this reviewEquivalents for service industry public ornot-for-profit sector innovations are somewhatlacking in the literature and constitute aresearch gap
Communications are important in projectmanagement Damanpour (1991) demon-strated the existence of a positive relationshipbetween internal communication and innova-tion Internal communication facilitates thedispersion of ideas within an organizationincreases the diversity and also contributes tothe team lsquoclimatersquo Communication can bemeasured by various integration mechanismseg committees numbers of meetings andcontacts (Damanpour 1991) There are also
copy Blackwell Publishing Ltd 2006 37
March 2006
measures of external communications whichtend to focus on whether communication istaking place the level at which it occurs andwith whom (Cebon and Newton 1999 Leeet al 1996 Rothwell 1992 Souitaris 2002)These measures of internal and external com-munication in the literature are based on bothsubjective evaluations and objective frequencycounts Subjective measures include lsquowe alwaysconsult supplierscustomers on new productideasrsquo (Parthasarthy and Hammond 2002) andlsquodegree of organization members involved andparticipating in extra-organizational professionalactivitiesrsquo (Damanpour 1991) Objective countsinclude (Damanpour 1991) lsquoextent of commu-nication amongst organizational units or groupsmeasured by various integrating mechanismssuch as numbers of committees and frequencyof meetingsrsquo (Anderson and West 1998)lsquofrequency of formal meetings concerningnew ideasrsquo (Souitaris 2002 Szakonyi 1994)lsquohow well do the technical and finance peoplecommunicate with one anotherrsquo
It is widely recognized that collaboratingwith suppliers (Bessant 2003) and customers(von Hippel 1986) can also make a significantcontribution to the innovation processMeasures of collaborative working includethe use of guest engineers (Maylor 2001) thepercentage of projects in co-operation withthird parties (Kerssens-van Drongelen andBilderbeek 1999) and the extent to whichdecision-making at top levels is characterizedby cross-functional discussions (Miller andFriesen 1982) In addition Jassawalla andSashittal (1999) identify some characteristicsof internal collaboration ie that teams arecharacterized by their mindfulness levels ofat-stakeness synergy and transparency butthey do not suggest how these aspects mightbe measured which constitutes a furtherresearch gap
Commercialization
Commercialization can be considered to bethe second of the two phases in Zaltman et alrsquos(1973) conceptualization of the innovation
process that is lsquoimplementationrsquo This canmean taking an innovation to market (Chakra-vorti 2004) but may also include convincingproduction managers to adopt a series of newtechniques available to them (Single andSpurgeon 1996) Indeed the successful intro-duction of new products and services intomarkets is important for the survival andgrowth of organizations Kelm et al (1995)regard commercialization as a transitionalphase in which the organization becomesless reliant on its technological capabilities(important during the activities of initiation)but more dependent on market dynamicsCommercialization is concerned with makingthe innovative process or product a commer-cial success it includes issues such as market-ing sales distribution and joint venturesWhile technical capabilities are important forthe early stages of the innovation process anddevelopment activities for the launch andimplementation stage it is marketing capabili-ties (market investigation market testingpromotion etc) that are significant (Calantoneand di Benedetto 1988 Globe et al 1973)Verhaeghe and Kfir (2002) consider aspectsof commercialization under the headings ofmarket analysis and monitoring reaching thecustomer and market planning
Firm-level measures of the launch or com-mercialization process appear to be relativelythin In their description of the RampD processBalachandra and Brockhoff (1995) character-ize the commercialization stage as requiringlsquobig bucksrsquo market reviews and organiza-tional commitment Most measures appear tobe not much more sophisticated than thisMeasures are frequently restricted to numbersof products launched in a given period (egYoon and Lilien 1985) There is thoughsome focus on market analysis and monitor-ing (Verhaeghe and Kfir 2002) Song andParry (1996) employ a set of measures oflaunch proficiency (salesforce distributionaland promotional support) that directly addressthe lsquoadequacyrsquo of the organizationrsquos facilities inthese areas as do Avlonitis et al (2001) Andthere is a limited mention of the commercial
38 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
intentions of an organizationrsquos competitors(Calantone and di Benedetto 1988) Thethemes of proficiency of personnel in this area(eg Atuahene-Gima 1995 Cebon and New-ton 1999) of adherence to a commercializa-tion schedule (eg Griffin and Page 1993) andof formal post-launch reviews (Atuahene-Gima 1995 von Zedtwitz 2002) can also befound in the literature
Even in the work that addresses post-project reviews very little attention is directedtowards measuring innovation launch orcommercialization However this comes aslittle surprise as Hultink et al (2000) recentlyobserved that little work has been done in thearea perhaps because at least in the innova-tion literature launch activities appear to beconsidered the domain of other specialistsparticularly marketers and the process is seenas separate from innovation In their studythey investigated launch decisions associatedwith success for consumer and business-to-business products Much of the literature thatconsiders launch and commercialization doesso from the viewpoint of the adopter andassesses rates of adoption and diffusion ofinnovations over time across populations(Kessler and Chakrabarti 1996 Van DenBulte 2000)
The area of commercialization appears tobe the least developed of the issues involvedin innovation management This is a huge gapbecause without this last step the previoussteps of assembling inputs project manage-ment etc will not result in a commerciallyviable outcome for the firm We believe thatthis area of innovation is in urgent need offurther development from both theory andmeasurement viewpoints
Discussion
Innovation management measurement is acritical discipline for both academics andpractitioners The capacity of organizations toinnovate is determined by multiple factors thatrelate both to their own internal organizationand to their market environment (Rothwell
et al 1974) and the task of generating andthen converting ideas into usable and market-able products requires high levels of inter-functional co-ordination and integration Thispaper opened with the general observationthat innovation measurement does not appearto take place routinely within managementpractice and that where it does it tends tofocus on output measures Further from therelatively small number of empirical studiesof measurement in practice measurement ofinnovation management appears to be under-taken infrequently in an ad hoc fashion andrelies on dated unbalanced or under-specifiedmodels of the innovation management phe-nomenon This suggests that a large part ofthe contemporary conceptualization of theinnovation management phenomenon is over-looked in practitionersrsquo measurement prac-tices and consequently that opportunities forthe more efficient and effective managementof the innovation process are not realizedSome possible reasons for this state of affairsare failure of academics to communicate ade-quately inconsistency inaccessibility andcomplexity of measures and poor synthesisand packaging
Following a review and synthesis of theliterature we proposed a seven-dimensionalconceptualization of the innovation manage-ment phenomenon and applied it to an exam-ination of the measurement problem Throughthe application of this framework to their ownparticular context it is suggested that practi-tioners will be able to conduct an evaluationof their own innovation management activityidentify gaps weaknesses or deficiencies andalso improvement potential Further it ishoped that organizations applying the frame-work will be able to tease out areas whereinnovation is only nominally adopted in theirprocesses and identify areas where attentionand resources might be focused
From the perspective of its management itis no longer sufficient to treat innovation as alinear process where resources are channelledat one end from which emerges a new prod-uct or process The measurement framework
copy Blackwell Publishing Ltd 2006 39
March 2006
presented in Table 2 shows the breadth andvariety of elements of innovation managementthat ideally need to be measured There havebeen several studies that have investigated thelimitations of various approaches to measure-ment (eg Werner and Souder 1997) and ofspecific measures (eg Trajtenberg 1990) asthey relate to the practice of innovation Thechoice of an appropriate RampD measurementmetric depends on the userrsquos needs in terms ofcomprehensiveness of measurement type ofRampD being measured available data andamount of effort the user can afford to allocateto the exercise Nonetheless the commonciting across various papers of the measuresnoted in the innovation management frame-work presented here suggests that a base setof innovation management measures isimplicitly present in the literature eventhough they may be fragmented in appearanceand presentation By pulling together theinnovation management framework fromdiverse sources this paper aims to bring suchissues into the open and identify relevantresearch gaps Table 2 can be viewed as thebasis for a balanced scorecard (Kaplan andNorton 1992) for innovation managementthat is as a balanced set of areas that need tobe measured in order to gain insight into anorganizationrsquos holistic ability to manage inno-vation Such multidimensional approaches tomeasurement have been found in other areasof management to be an improvement on sim-ple one-dimensional measures and to be ableto capture both short- and long-term aspectsof value creation in the firm (Phelps 2004)
We have identified a large number of meas-ures and approaches in a variety of innovationmanagement areas and we have constructed ageneric set of innovation management meas-urement areas to act as a framework for bal-anced measurement However in several ofthese areas measurement gaps have beenidentified These gaps are of two types valid-ity gaps and omission gaps Validity gaps arisewhere there is insufficient evidence that pro-posed measures actually do capture drivers oroutputs of innovation management for example
we have noted the objections to counts ofpatents or increasing expenditure on RampD beingused as measures of innovative organizationsSimilarly there is an absence of evidence thatthe large number of subjective perceptions ofinnovation management practices proposed(lsquowe do Arsquo lsquowe are good at Brsquo) actually relateto innovation management performance
Omission gaps occur where the importanceof an aspect of innovation management is sup-ported in the literature but measures for thisaspect are lacking Omission gaps are particu-larly prevalent in the elements of innovationmanagement such as knowledge managementinnovation strategy and commercializationthat do not feature strongly in the literature ontechnological and manufacturing-based inno-vation Another area traditionally not givenmuch emphasis in this literature is organiza-tion and culture which fortunately is bettertreated by the organizational behaviour litera-ture where a number of measures have beendeveloped Much of the current state of meas-urement practice can be traced back to the dis-ciplinersquos early manufacturing RampD and NPDfocus While product innovation is undoubt-edly important it is only one dimension of anorganizationrsquos innovation agenda Process andorganizational innovations are recognizedtoo as critical for competitiveness yet theseperspectives are inadequately represented inmeasurement terms
General areas of omission in this fieldrelate to an over-reliance on financial meas-ures rather than process measures for exam-ple the use of financial measures of portfoliooptimization but an absence of portfoliocapability measures a similar reliance oncodified knowledge such as patents to theexclusion of more intangible measures suchas tacit knowledge the measurement of levelsof resources or activities with no indication ofwhat an optimal level would be the measure-ment of drivers of innovation without meas-ures of whether these drivers are aligned witheach other and with firm strategy measures ofpresence that do not measure quality (eg theuse of dichotomous (yesno) measures that do
40 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
not indicate how well an action is implementedand measures of the presence of leadership(such as champions) but not of quality ofleadership) a general absence of measuresfor important properties of organizationalstructures such as flexibility and a lack ofmeasures of the match between structure andenvironment a technological and NPD bias toproject management measures and a relativeabsence of measures for service sectors apaucity of measures for internal communica-tions and a general lack of measures forcommercialization management ndash in particulararound marketing and sales capabilities forinnovative products and services All thesegaps provide the potential for further researchin innovation management measurement
The absence of an accepted framework ofinnovation management measures leads notonly to the gaps identified above but also toother problems in the literature One is that itis frequently unclear whether or not the met-rics used are of the researchersrsquo own devisingdrawn from the literature or are what are usedby the organizations being studied Nor is italways clear when metrics are devised orrecommended whether they are intended foruse in a research capacity or for managementtasks Further the measures proposed in theliterature often seem to be proposed abstractlywith little consideration given to the use ofmeasures as a management tool in the day-to-day context of managing innovation In theabsence of a comprehensive framework forinnovation management measurement organ-izations will inevitably resort to ad hoc andpartial metrics which can encourage wastefulpractice (eg measuring innovation managementcapability according to annual RampD spend)We hope that the framework constructed inthis paper will be useful in the constructionof comprehensive measures of innovationmanagement
Acknowledgements
The research reported here was supported bya grant from Cranfield School of Management
the authors gratefully acknowledge this supportFurther the authors are grateful to the editorsand two anonymous reviewers for their helpfuland insightful comments on previous versionsof this paper
Note
1 Corresponding author Telephone +44 (0) 207594 9137 e-mail radamsimperialacuk
References
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March 2006
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Innovation management measurement A review
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Dyer B and Song XM (1998) Innovation strategyand sanctioned conflict a new edge in innovationJournal of Product Innovation Management 15505ndash519
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Glaser BG and Strauss AL (1967) The Discoveryof Grounded Theory Strategies for QualitativeResearch London Aldine
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Goffin K and Pfeiffer R (1999) Innovation Man-agement in UK and German Manufacturing Com-panies London Anglo-German Foundation for theStudy of Industrial Society
Grant RM (1991) The resource-based theory ofcompetitive advantage implications for strategyformulation California Management Review 33114ndash135
Greve HR (2003) A behavioral theory of RampDexpenditures and innovations evidence fromshipbuilding Academy of Management Journal 46685ndash702
Griffin A (1997) PDMA research on new productdevelopment practices updating trends and bench-marking best practices Journal of Product Innova-tion Management 14 429ndash458
Griffin A and Page AL (1993) An interim reporton measuring product development success andfailure Journal of Product Innovation Manage-ment 10 291ndash308
Griliches Z (1990) Patent statistics as economicindicators a survey Journal of Economic Litera-ture 28 1661ndash1707
Hall DL and Nauda A (1990) An interactiveapproach for selecting IRampD projects IEEE Trans-actions on Engineering Management 37 126ndash133
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Henriksen AD and Traynor AJ (1999) A practicalRampD project-selection scoring tool IEEE Trans-actions on Engineering Management 46 158ndash170
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Hope Hailey V (2001) Breaking the mould Innova-tion as a strategy for corporate renewal Inter-national Journal of Human Resource Management12 1126ndash1140
Hull R Coombs R and Peltu M (2000) Know-ledge management practices for innovation anaudit tool for improvement International Journalof Technology Management 20 633ndash656
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Jassawalla AR and Sashittal HC (1999) Buildingcollaborative cross-functional new product teamsAcademy of Management Executive 13 50ndash63
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Kaplan RS and Norton DP (1992) The balancedscorecard ndash measures that drive performance HarvardBusiness Review JanuaryndashFebruary 71ndash79
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Kelm KM Narayanan VK and Pinches GE (1995)Shareholder value creation during research-and-development innovation and commercialization stagesAcademy of Management Journal 38 770ndash786
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Innovation management measurement A review
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Kivimaumlki M Lansisalmi H Elovainio M Heik-kila A Lindstrom K Harisalo R Sipila K andPuolimatka L (2000) Communication as a deter-minant of organizational innovation RampD Man-agement 30 33ndash42
Kleinknecht A (1987) Measuring RampD in smallfirms how much are we missing Journal of Indus-trial Economics 36 253ndash256
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Rickards T (1991) Innovation and creativity treesand pathways RampD Management 21 97ndash108
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Stock GN Greis NP and Fischer WA (2001)Absorptive capacity and new product developmentJournal of High Technology ManagementResearch 12 77ndash91
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Tranfield D Denyer D and Smart P (2003)Towards a methodology for developing evidence-informed management knowledge by means of asystematic review British Journal of Management14 207ndash222
Tsai W (2001) Knowledge transfer in intraorganiza-tional networks effects of network position andabsorptive capacity on business unit innovation andperformance Academy of Management Journal44 996ndash1004
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Veryzer RW (1998) Discontinuous innovation andthe new product development process Journal ofProduct Innovation Management 15 304ndash321
Volberda HW (1996) Towards the flexible formhow to remain vital in hypercompetitive environ-ments Organizational Science 7 359ndash374
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West MA (1990) The social psychology of innova-tion in groups In West MA and Farr JL (eds)Innovation and Creativity at Work Psychologicaland Organizational Strategies Chichester UKJohn Wiley pp 309ndash333
West MA and Anderson NR (1996) Innovation intop management teams Journal of Applied Psychol-ogy 81 680ndash693
White A (2002) Enabling factors in the front end ofthe innovation process In Proceedings 9thInternational Product Development ManagementConference Sophia Antipolis France BrusselsEuropean Institute for Advanced Studies inManagement pp 879ndash887
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extension Academy of Management Review 27185
Zaltman G Duncan R and Holbek J (1973) Inno-vations and Organizations New York John Wiley
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Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
36 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Project Management
Project management is concerned with theprocesses that turn the inputs into a marketa-ble innovation The innovation process iscomplex comprising a myriad of events andactivities some of which can be identified as asequence and some of which occur concur-rently and it is clearly possible that innova-tion processes will differ to some degreeacross organizations and even within organi-zations on a project-by-project basis Havingan efficient process that is able to manage theambiguity of the innovation is universally agreedto be critical to innovation (Globe et al 1973)
Various approaches have been taken tomodelling innovation processes as a series ofevents (Zaltman et al 1973) as a social interac-tion (Voss et al 1999) as a series of transactions(Nelson and Winter 1982) and as a process ofcommunication (Farrukh et al 2000) The his-tory of project management research is partlycharacterized by a debate regarding the extentto which events and activities within the processoccur in linearly sequential discrete identifiablestages (Zaltman et al 1973) or whether eventsare more disorganized (King 1992) or evenchaotic (Koput 1997) However despite thesedifferent viewpoints there are a number ofcommon elements that can be summarized asthe major components of the innovation projectmanagement These are project efficiencytools communications and collaboration
Several studies make efforts to measureproject management efficiency mostly in theform of comparisons between budget and actual(project costs project duration revenue fore-casting) Another measure of project manage-ment success is speed Innovation speed hasbeen positively correlated with product qual-ity or the degree to which it satisfies customerrequirements measures include speed (Hauserand Zettelmeyer 1997) performance againstschedule (Chiesa and Masella 1994) and dura-tion of the process (Cebon and Newton 1999)
To achieve efficiency it is widely recom-mended that organizations seeking to innovateshould establish formal processes for innovat-
ing and make use of tools and techniquesthat may facilitate innovative endeavours Thestage-gate process (Cooper 1990) is possiblythe most familiar of these but other method-ologies for innovation project managementexist including Phased Development Productand Cycle-time Excellence and Total Design(see Jenkins et al (1997) for a discussion)These methodologies have in common theseparation of the product development processinto structured and discrete stages which eachhave milestones in the form of quality controlcheckpoints at which stopgo decisions are madewith regard to the progress of the project Thesehighly structured approaches to the manage-ment of the innovation process began toemerge in the 1990s (Veryzer 1998) The useof structured tools and processes can bemeasured by project process evaluations forexample the use of a formal problem-findingproblem-solving cycle (Bessant 2003) the useof formal post-launch evaluation procedures(Atuahene-Gima 1995) or the use of certifiedprocesses (Chiesa et al 1996) These rathergeneral process measures have been supple-mented by measures of the use of specificinstruments and tools such as interactiveCAD or CAM (Maylor 2001) or the use ofcomputer-integrated manufacturing processes(Parthasarthy and Hammond 2002) but wenote that these measures betray the technologicaland NPD heritage that underpins many of theinnovation measures identified in this reviewEquivalents for service industry public ornot-for-profit sector innovations are somewhatlacking in the literature and constitute aresearch gap
Communications are important in projectmanagement Damanpour (1991) demon-strated the existence of a positive relationshipbetween internal communication and innova-tion Internal communication facilitates thedispersion of ideas within an organizationincreases the diversity and also contributes tothe team lsquoclimatersquo Communication can bemeasured by various integration mechanismseg committees numbers of meetings andcontacts (Damanpour 1991) There are also
copy Blackwell Publishing Ltd 2006 37
March 2006
measures of external communications whichtend to focus on whether communication istaking place the level at which it occurs andwith whom (Cebon and Newton 1999 Leeet al 1996 Rothwell 1992 Souitaris 2002)These measures of internal and external com-munication in the literature are based on bothsubjective evaluations and objective frequencycounts Subjective measures include lsquowe alwaysconsult supplierscustomers on new productideasrsquo (Parthasarthy and Hammond 2002) andlsquodegree of organization members involved andparticipating in extra-organizational professionalactivitiesrsquo (Damanpour 1991) Objective countsinclude (Damanpour 1991) lsquoextent of commu-nication amongst organizational units or groupsmeasured by various integrating mechanismssuch as numbers of committees and frequencyof meetingsrsquo (Anderson and West 1998)lsquofrequency of formal meetings concerningnew ideasrsquo (Souitaris 2002 Szakonyi 1994)lsquohow well do the technical and finance peoplecommunicate with one anotherrsquo
It is widely recognized that collaboratingwith suppliers (Bessant 2003) and customers(von Hippel 1986) can also make a significantcontribution to the innovation processMeasures of collaborative working includethe use of guest engineers (Maylor 2001) thepercentage of projects in co-operation withthird parties (Kerssens-van Drongelen andBilderbeek 1999) and the extent to whichdecision-making at top levels is characterizedby cross-functional discussions (Miller andFriesen 1982) In addition Jassawalla andSashittal (1999) identify some characteristicsof internal collaboration ie that teams arecharacterized by their mindfulness levels ofat-stakeness synergy and transparency butthey do not suggest how these aspects mightbe measured which constitutes a furtherresearch gap
Commercialization
Commercialization can be considered to bethe second of the two phases in Zaltman et alrsquos(1973) conceptualization of the innovation
process that is lsquoimplementationrsquo This canmean taking an innovation to market (Chakra-vorti 2004) but may also include convincingproduction managers to adopt a series of newtechniques available to them (Single andSpurgeon 1996) Indeed the successful intro-duction of new products and services intomarkets is important for the survival andgrowth of organizations Kelm et al (1995)regard commercialization as a transitionalphase in which the organization becomesless reliant on its technological capabilities(important during the activities of initiation)but more dependent on market dynamicsCommercialization is concerned with makingthe innovative process or product a commer-cial success it includes issues such as market-ing sales distribution and joint venturesWhile technical capabilities are important forthe early stages of the innovation process anddevelopment activities for the launch andimplementation stage it is marketing capabili-ties (market investigation market testingpromotion etc) that are significant (Calantoneand di Benedetto 1988 Globe et al 1973)Verhaeghe and Kfir (2002) consider aspectsof commercialization under the headings ofmarket analysis and monitoring reaching thecustomer and market planning
Firm-level measures of the launch or com-mercialization process appear to be relativelythin In their description of the RampD processBalachandra and Brockhoff (1995) character-ize the commercialization stage as requiringlsquobig bucksrsquo market reviews and organiza-tional commitment Most measures appear tobe not much more sophisticated than thisMeasures are frequently restricted to numbersof products launched in a given period (egYoon and Lilien 1985) There is thoughsome focus on market analysis and monitor-ing (Verhaeghe and Kfir 2002) Song andParry (1996) employ a set of measures oflaunch proficiency (salesforce distributionaland promotional support) that directly addressthe lsquoadequacyrsquo of the organizationrsquos facilities inthese areas as do Avlonitis et al (2001) Andthere is a limited mention of the commercial
38 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
intentions of an organizationrsquos competitors(Calantone and di Benedetto 1988) Thethemes of proficiency of personnel in this area(eg Atuahene-Gima 1995 Cebon and New-ton 1999) of adherence to a commercializa-tion schedule (eg Griffin and Page 1993) andof formal post-launch reviews (Atuahene-Gima 1995 von Zedtwitz 2002) can also befound in the literature
Even in the work that addresses post-project reviews very little attention is directedtowards measuring innovation launch orcommercialization However this comes aslittle surprise as Hultink et al (2000) recentlyobserved that little work has been done in thearea perhaps because at least in the innova-tion literature launch activities appear to beconsidered the domain of other specialistsparticularly marketers and the process is seenas separate from innovation In their studythey investigated launch decisions associatedwith success for consumer and business-to-business products Much of the literature thatconsiders launch and commercialization doesso from the viewpoint of the adopter andassesses rates of adoption and diffusion ofinnovations over time across populations(Kessler and Chakrabarti 1996 Van DenBulte 2000)
The area of commercialization appears tobe the least developed of the issues involvedin innovation management This is a huge gapbecause without this last step the previoussteps of assembling inputs project manage-ment etc will not result in a commerciallyviable outcome for the firm We believe thatthis area of innovation is in urgent need offurther development from both theory andmeasurement viewpoints
Discussion
Innovation management measurement is acritical discipline for both academics andpractitioners The capacity of organizations toinnovate is determined by multiple factors thatrelate both to their own internal organizationand to their market environment (Rothwell
et al 1974) and the task of generating andthen converting ideas into usable and market-able products requires high levels of inter-functional co-ordination and integration Thispaper opened with the general observationthat innovation measurement does not appearto take place routinely within managementpractice and that where it does it tends tofocus on output measures Further from therelatively small number of empirical studiesof measurement in practice measurement ofinnovation management appears to be under-taken infrequently in an ad hoc fashion andrelies on dated unbalanced or under-specifiedmodels of the innovation management phe-nomenon This suggests that a large part ofthe contemporary conceptualization of theinnovation management phenomenon is over-looked in practitionersrsquo measurement prac-tices and consequently that opportunities forthe more efficient and effective managementof the innovation process are not realizedSome possible reasons for this state of affairsare failure of academics to communicate ade-quately inconsistency inaccessibility andcomplexity of measures and poor synthesisand packaging
Following a review and synthesis of theliterature we proposed a seven-dimensionalconceptualization of the innovation manage-ment phenomenon and applied it to an exam-ination of the measurement problem Throughthe application of this framework to their ownparticular context it is suggested that practi-tioners will be able to conduct an evaluationof their own innovation management activityidentify gaps weaknesses or deficiencies andalso improvement potential Further it ishoped that organizations applying the frame-work will be able to tease out areas whereinnovation is only nominally adopted in theirprocesses and identify areas where attentionand resources might be focused
From the perspective of its management itis no longer sufficient to treat innovation as alinear process where resources are channelledat one end from which emerges a new prod-uct or process The measurement framework
copy Blackwell Publishing Ltd 2006 39
March 2006
presented in Table 2 shows the breadth andvariety of elements of innovation managementthat ideally need to be measured There havebeen several studies that have investigated thelimitations of various approaches to measure-ment (eg Werner and Souder 1997) and ofspecific measures (eg Trajtenberg 1990) asthey relate to the practice of innovation Thechoice of an appropriate RampD measurementmetric depends on the userrsquos needs in terms ofcomprehensiveness of measurement type ofRampD being measured available data andamount of effort the user can afford to allocateto the exercise Nonetheless the commonciting across various papers of the measuresnoted in the innovation management frame-work presented here suggests that a base setof innovation management measures isimplicitly present in the literature eventhough they may be fragmented in appearanceand presentation By pulling together theinnovation management framework fromdiverse sources this paper aims to bring suchissues into the open and identify relevantresearch gaps Table 2 can be viewed as thebasis for a balanced scorecard (Kaplan andNorton 1992) for innovation managementthat is as a balanced set of areas that need tobe measured in order to gain insight into anorganizationrsquos holistic ability to manage inno-vation Such multidimensional approaches tomeasurement have been found in other areasof management to be an improvement on sim-ple one-dimensional measures and to be ableto capture both short- and long-term aspectsof value creation in the firm (Phelps 2004)
We have identified a large number of meas-ures and approaches in a variety of innovationmanagement areas and we have constructed ageneric set of innovation management meas-urement areas to act as a framework for bal-anced measurement However in several ofthese areas measurement gaps have beenidentified These gaps are of two types valid-ity gaps and omission gaps Validity gaps arisewhere there is insufficient evidence that pro-posed measures actually do capture drivers oroutputs of innovation management for example
we have noted the objections to counts ofpatents or increasing expenditure on RampD beingused as measures of innovative organizationsSimilarly there is an absence of evidence thatthe large number of subjective perceptions ofinnovation management practices proposed(lsquowe do Arsquo lsquowe are good at Brsquo) actually relateto innovation management performance
Omission gaps occur where the importanceof an aspect of innovation management is sup-ported in the literature but measures for thisaspect are lacking Omission gaps are particu-larly prevalent in the elements of innovationmanagement such as knowledge managementinnovation strategy and commercializationthat do not feature strongly in the literature ontechnological and manufacturing-based inno-vation Another area traditionally not givenmuch emphasis in this literature is organiza-tion and culture which fortunately is bettertreated by the organizational behaviour litera-ture where a number of measures have beendeveloped Much of the current state of meas-urement practice can be traced back to the dis-ciplinersquos early manufacturing RampD and NPDfocus While product innovation is undoubt-edly important it is only one dimension of anorganizationrsquos innovation agenda Process andorganizational innovations are recognizedtoo as critical for competitiveness yet theseperspectives are inadequately represented inmeasurement terms
General areas of omission in this fieldrelate to an over-reliance on financial meas-ures rather than process measures for exam-ple the use of financial measures of portfoliooptimization but an absence of portfoliocapability measures a similar reliance oncodified knowledge such as patents to theexclusion of more intangible measures suchas tacit knowledge the measurement of levelsof resources or activities with no indication ofwhat an optimal level would be the measure-ment of drivers of innovation without meas-ures of whether these drivers are aligned witheach other and with firm strategy measures ofpresence that do not measure quality (eg theuse of dichotomous (yesno) measures that do
40 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
not indicate how well an action is implementedand measures of the presence of leadership(such as champions) but not of quality ofleadership) a general absence of measuresfor important properties of organizationalstructures such as flexibility and a lack ofmeasures of the match between structure andenvironment a technological and NPD bias toproject management measures and a relativeabsence of measures for service sectors apaucity of measures for internal communica-tions and a general lack of measures forcommercialization management ndash in particulararound marketing and sales capabilities forinnovative products and services All thesegaps provide the potential for further researchin innovation management measurement
The absence of an accepted framework ofinnovation management measures leads notonly to the gaps identified above but also toother problems in the literature One is that itis frequently unclear whether or not the met-rics used are of the researchersrsquo own devisingdrawn from the literature or are what are usedby the organizations being studied Nor is italways clear when metrics are devised orrecommended whether they are intended foruse in a research capacity or for managementtasks Further the measures proposed in theliterature often seem to be proposed abstractlywith little consideration given to the use ofmeasures as a management tool in the day-to-day context of managing innovation In theabsence of a comprehensive framework forinnovation management measurement organ-izations will inevitably resort to ad hoc andpartial metrics which can encourage wastefulpractice (eg measuring innovation managementcapability according to annual RampD spend)We hope that the framework constructed inthis paper will be useful in the constructionof comprehensive measures of innovationmanagement
Acknowledgements
The research reported here was supported bya grant from Cranfield School of Management
the authors gratefully acknowledge this supportFurther the authors are grateful to the editorsand two anonymous reviewers for their helpfuland insightful comments on previous versionsof this paper
Note
1 Corresponding author Telephone +44 (0) 207594 9137 e-mail radamsimperialacuk
References
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Atuahene-Gima K (1995) An exploratory analysisof the input of market orientation on new productperformance a contingency approach Journal ofProduct Innovation Management 12 275ndash293
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March 2006
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Cooper RG (1984) The strategyndashperformance linkin product innovation RampD Management 14 247ndash259
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Cooper RG (1990) Stage-gate systems a new toolfor managing new products Business Horizons 3344ndash56
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Cooper RG Edgett SJ and Kleinschmidt EJ (2004)Benchmarking best NPD practices Research-Technology Management 47 50ndash59
Cordero R (1990) The measurement of innovationperformance in the firm an overview ResearchPolicy 19 185ndash192
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Covin JG and Slevin DP (1989) Strategic manage-ment of small firms in hostile and benign environ-ments Strategic Management Journal 10 75ndash87
Daft R (1978) A dual-core model of organizationalinnovation Academy of Management Journal 21193ndash210
Damanpour F (1991) Organizational innovation ameta-analysis of effects of determinants and mod-erators Academy of Management Journal 34 555ndash590
Damanpour F (1996) Organizational complexity andinnovation developing and testing multiple contin-gency models Management Science 42 693ndash716
Davis MC (1998) Knowledge management Infor-mation Strategy The Executiversquos Journal 15 11ndash22
De Brentani U (1991) Success factors in developingnew business services European Journal of Mar-keting 25 33ndash60
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Denyer D and Neely A (2004) Introduction to spe-cial issue innovation and productivity performancein the UK International Journal of ManagementReviews 45 131ndash135
Di Benedetto CA (1996) Identifying the key suc-cess factors in new product launch Journal ofProduct Innovation Management 16 530ndash544
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DTI (1998) An Audience With Innovation Innovationin Management London Department of Trade andIndustry
Dyer B and Song XM (1998) Innovation strategyand sanctioned conflict a new edge in innovationJournal of Product Innovation Management 15505ndash519
Ekvall G (1996) Organizational climate for creativ-ity and innovation European Journal of Work andOrganizational Psychology 5 105ndash123
Ernst H (2002) Success factors of new productdevelopment a review of the empirical literatureInternational Journal of Management Reviews 41ndash40
Farrukh C Phaal R Probert D Gregory M andWright J (2000) Developing a process for therelative valuation of RampD programmes RampDManagement 30 43ndash53
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Geisler E (1995) An integrated costndashperformancemodel of research-and-development evaluationOmega ndash International Journal of ManagementScience 23 281ndash294
Glaser BG and Strauss AL (1967) The Discoveryof Grounded Theory Strategies for QualitativeResearch London Aldine
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Grant RM (1991) The resource-based theory ofcompetitive advantage implications for strategyformulation California Management Review 33114ndash135
Greve HR (2003) A behavioral theory of RampDexpenditures and innovations evidence fromshipbuilding Academy of Management Journal 46685ndash702
Griffin A (1997) PDMA research on new productdevelopment practices updating trends and bench-marking best practices Journal of Product Innova-tion Management 14 429ndash458
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Kirton MJ (1976) Adaptors and innovators adescription and measure Journal of Applied Psy-chology 61 622ndash629
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Pugh DS Hickson DJ Hinings CR and TurnerC (1969) The context of organization structuresAdministrative Science Quarterly 14 91ndash114
Ramanujam V and Mensch GO (1985) Improvingthe strategyndashinnovation link Journal of ProductInnovation Management 2 213ndash223
Richard O McMillan A Chadwick K and DwyerS (2003) Employing an innovation strategy inracially diverse workforces ndash effects on firm per-formance Group amp Organization Management 28107ndash126
Rickards T (1991) Innovation and creativity treesand pathways RampD Management 21 97ndash108
Rochford L (1991) Generating and screening newproduct ideas Industrial Marketing Management20 287ndash296
Rothwell R (1992) Successful industrial innovationcritical factors for the 1990s RampD Management22 221ndash239
Rothwell R Freeman C Horseley A JervisVTP Robertson AB and Townsend J (1974)SAPPHO updated ndash Project SAPPHO phase IIResearch Policy 3 258ndash291
Saleh SD and Wang CK (1993) The managementof innovation ndash strategy structure and organiza-tional climate IEEE Transactions on EngineeringManagement 40 14ndash21
Schmidt RL and Freeland JR (1992) Recentprogress in modelling RampD project-selection proc-esses IEEE Transactions on Engineering Manage-ment 39 189ndash201
Schroeder RG Van de Ven AH Scudder GDand Polley D (1989) The development of innova-tion ideas In Van de Ven AH Angle HL andPoole M (eds) Research on the Management ofInnovation The Minnesota Studies New YorkHarper amp Row pp 107ndash133
Scott S and Bruce R (1994) Determinants ofinnovative behaviour a path model of individualinnovation Academy of Management Journal 37580ndash607
Shane S Venkataraman S and MacMillan I (1995)Cultural differences in innovation championingstrategies Journal of Management 21 931ndash952
Shepard HA (1967) Innovation-resisting and inno-vation producing organizations Journal of Busi-ness 40 470ndash477
Shin J and McClomb GE (1998) Top executiveleadership and organizational innovation an
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Innovation management measurement A review
empirical investigation of nonprofit human serviceorganizations (HSOS) Administration in SocialWork 22 1ndash21
Single AW and Spurgeon WM (1996) Creatingand commercializing innovation inside a skunkworks Research-Technology Management 39 38ndash41
Song XM and Parry ME (1996) What separatesJapanese new product winners from losersJournal of Product Innovation Management 13422ndash439
Souitaris V (2002) Firm-specific competenciesdetermining technological innovation a survey inGreece RampD Management 32 61ndash77
Stock GN Greis NP and Fischer WA (2001)Absorptive capacity and new product developmentJournal of High Technology ManagementResearch 12 77ndash91
Sundbo J (1997) Management of innovation inservices Service Industries Journal 17 432ndash455
Sveiby KE (1997) The New Organizational WealthManaging and Measuring Knowledge-BasedAssets San Francisco CA Berrett-Koehler
Szakonyi R (1994) Measuring RampD effectiveness IResearch-Technology Management 37 27ndash32
Thompson L (2003) Improving the creativity oforganizational work groups Academy of Manage-ment Executive 17 96ndash109
Tidd J Bessant J and Pavitt K (1997) ManagingInnovation Integrating Technological Market andOrganizational Change Chichester UK JohnWiley
Tipping J and Zeffren E (1995) Assessing thevalue of your technology ResearchndashTechnologyManagement 38 22ndash40
Trajtenberg M (1990) A penny for your quotes ndashpatent citations and the value of innovations RandJournal of Economics 21 172ndash187
Tranfield D Denyer D and Smart P (2003)Towards a methodology for developing evidence-informed management knowledge by means of asystematic review British Journal of Management14 207ndash222
Tsai W (2001) Knowledge transfer in intraorganiza-tional networks effects of network position andabsorptive capacity on business unit innovation andperformance Academy of Management Journal44 996ndash1004
Van Den Bulte C (2000) New product diffusionacceleration measurement and analysis MarketingScience 19 366ndash380
Verhaeghe A and Kfir R (2002) Managing innovationin a knowledge intensive technology organisation(KITO) RampD Management 32 409ndash417
Verworn B (2002) The fuzzy front end of productdevelopment an exploratory study In Proceedings9th International Product Development ManagementConference Sophia Antipolis France pp 863ndash878Brussels European Institute for Advanced Studiesin Management
Veryzer RW (1998) Discontinuous innovation andthe new product development process Journal ofProduct Innovation Management 15 304ndash321
Volberda HW (1996) Towards the flexible formhow to remain vital in hypercompetitive environ-ments Organizational Science 7 359ndash374
Von Hippel E (1986) Lead users a source of novelproduct concepts Management Science 32 791ndash805
Von Zedtwitz M (2002) Organizational learningthrough post-project reviews in RampD RampD Man-agement 32 255ndash268
Voss C Chase R and Roth A (1999) Internationalservice study Decision Line May 4ndash7
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Werner BM and Souder WE (1997) MeasuringRampD performance ndash state of the art Research-Technology Management 40 34ndash42
West MA (1990) The social psychology of innova-tion in groups In West MA and Farr JL (eds)Innovation and Creativity at Work Psychologicaland Organizational Strategies Chichester UKJohn Wiley pp 309ndash333
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White A (2002) Enabling factors in the front end ofthe innovation process In Proceedings 9thInternational Product Development ManagementConference Sophia Antipolis France BrusselsEuropean Institute for Advanced Studies inManagement pp 879ndash887
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copy Blackwell Publishing Ltd 2006 47
March 2006
extension Academy of Management Review 27185
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Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
copy Blackwell Publishing Ltd 2006 37
March 2006
measures of external communications whichtend to focus on whether communication istaking place the level at which it occurs andwith whom (Cebon and Newton 1999 Leeet al 1996 Rothwell 1992 Souitaris 2002)These measures of internal and external com-munication in the literature are based on bothsubjective evaluations and objective frequencycounts Subjective measures include lsquowe alwaysconsult supplierscustomers on new productideasrsquo (Parthasarthy and Hammond 2002) andlsquodegree of organization members involved andparticipating in extra-organizational professionalactivitiesrsquo (Damanpour 1991) Objective countsinclude (Damanpour 1991) lsquoextent of commu-nication amongst organizational units or groupsmeasured by various integrating mechanismssuch as numbers of committees and frequencyof meetingsrsquo (Anderson and West 1998)lsquofrequency of formal meetings concerningnew ideasrsquo (Souitaris 2002 Szakonyi 1994)lsquohow well do the technical and finance peoplecommunicate with one anotherrsquo
It is widely recognized that collaboratingwith suppliers (Bessant 2003) and customers(von Hippel 1986) can also make a significantcontribution to the innovation processMeasures of collaborative working includethe use of guest engineers (Maylor 2001) thepercentage of projects in co-operation withthird parties (Kerssens-van Drongelen andBilderbeek 1999) and the extent to whichdecision-making at top levels is characterizedby cross-functional discussions (Miller andFriesen 1982) In addition Jassawalla andSashittal (1999) identify some characteristicsof internal collaboration ie that teams arecharacterized by their mindfulness levels ofat-stakeness synergy and transparency butthey do not suggest how these aspects mightbe measured which constitutes a furtherresearch gap
Commercialization
Commercialization can be considered to bethe second of the two phases in Zaltman et alrsquos(1973) conceptualization of the innovation
process that is lsquoimplementationrsquo This canmean taking an innovation to market (Chakra-vorti 2004) but may also include convincingproduction managers to adopt a series of newtechniques available to them (Single andSpurgeon 1996) Indeed the successful intro-duction of new products and services intomarkets is important for the survival andgrowth of organizations Kelm et al (1995)regard commercialization as a transitionalphase in which the organization becomesless reliant on its technological capabilities(important during the activities of initiation)but more dependent on market dynamicsCommercialization is concerned with makingthe innovative process or product a commer-cial success it includes issues such as market-ing sales distribution and joint venturesWhile technical capabilities are important forthe early stages of the innovation process anddevelopment activities for the launch andimplementation stage it is marketing capabili-ties (market investigation market testingpromotion etc) that are significant (Calantoneand di Benedetto 1988 Globe et al 1973)Verhaeghe and Kfir (2002) consider aspectsof commercialization under the headings ofmarket analysis and monitoring reaching thecustomer and market planning
Firm-level measures of the launch or com-mercialization process appear to be relativelythin In their description of the RampD processBalachandra and Brockhoff (1995) character-ize the commercialization stage as requiringlsquobig bucksrsquo market reviews and organiza-tional commitment Most measures appear tobe not much more sophisticated than thisMeasures are frequently restricted to numbersof products launched in a given period (egYoon and Lilien 1985) There is thoughsome focus on market analysis and monitor-ing (Verhaeghe and Kfir 2002) Song andParry (1996) employ a set of measures oflaunch proficiency (salesforce distributionaland promotional support) that directly addressthe lsquoadequacyrsquo of the organizationrsquos facilities inthese areas as do Avlonitis et al (2001) Andthere is a limited mention of the commercial
38 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
intentions of an organizationrsquos competitors(Calantone and di Benedetto 1988) Thethemes of proficiency of personnel in this area(eg Atuahene-Gima 1995 Cebon and New-ton 1999) of adherence to a commercializa-tion schedule (eg Griffin and Page 1993) andof formal post-launch reviews (Atuahene-Gima 1995 von Zedtwitz 2002) can also befound in the literature
Even in the work that addresses post-project reviews very little attention is directedtowards measuring innovation launch orcommercialization However this comes aslittle surprise as Hultink et al (2000) recentlyobserved that little work has been done in thearea perhaps because at least in the innova-tion literature launch activities appear to beconsidered the domain of other specialistsparticularly marketers and the process is seenas separate from innovation In their studythey investigated launch decisions associatedwith success for consumer and business-to-business products Much of the literature thatconsiders launch and commercialization doesso from the viewpoint of the adopter andassesses rates of adoption and diffusion ofinnovations over time across populations(Kessler and Chakrabarti 1996 Van DenBulte 2000)
The area of commercialization appears tobe the least developed of the issues involvedin innovation management This is a huge gapbecause without this last step the previoussteps of assembling inputs project manage-ment etc will not result in a commerciallyviable outcome for the firm We believe thatthis area of innovation is in urgent need offurther development from both theory andmeasurement viewpoints
Discussion
Innovation management measurement is acritical discipline for both academics andpractitioners The capacity of organizations toinnovate is determined by multiple factors thatrelate both to their own internal organizationand to their market environment (Rothwell
et al 1974) and the task of generating andthen converting ideas into usable and market-able products requires high levels of inter-functional co-ordination and integration Thispaper opened with the general observationthat innovation measurement does not appearto take place routinely within managementpractice and that where it does it tends tofocus on output measures Further from therelatively small number of empirical studiesof measurement in practice measurement ofinnovation management appears to be under-taken infrequently in an ad hoc fashion andrelies on dated unbalanced or under-specifiedmodels of the innovation management phe-nomenon This suggests that a large part ofthe contemporary conceptualization of theinnovation management phenomenon is over-looked in practitionersrsquo measurement prac-tices and consequently that opportunities forthe more efficient and effective managementof the innovation process are not realizedSome possible reasons for this state of affairsare failure of academics to communicate ade-quately inconsistency inaccessibility andcomplexity of measures and poor synthesisand packaging
Following a review and synthesis of theliterature we proposed a seven-dimensionalconceptualization of the innovation manage-ment phenomenon and applied it to an exam-ination of the measurement problem Throughthe application of this framework to their ownparticular context it is suggested that practi-tioners will be able to conduct an evaluationof their own innovation management activityidentify gaps weaknesses or deficiencies andalso improvement potential Further it ishoped that organizations applying the frame-work will be able to tease out areas whereinnovation is only nominally adopted in theirprocesses and identify areas where attentionand resources might be focused
From the perspective of its management itis no longer sufficient to treat innovation as alinear process where resources are channelledat one end from which emerges a new prod-uct or process The measurement framework
copy Blackwell Publishing Ltd 2006 39
March 2006
presented in Table 2 shows the breadth andvariety of elements of innovation managementthat ideally need to be measured There havebeen several studies that have investigated thelimitations of various approaches to measure-ment (eg Werner and Souder 1997) and ofspecific measures (eg Trajtenberg 1990) asthey relate to the practice of innovation Thechoice of an appropriate RampD measurementmetric depends on the userrsquos needs in terms ofcomprehensiveness of measurement type ofRampD being measured available data andamount of effort the user can afford to allocateto the exercise Nonetheless the commonciting across various papers of the measuresnoted in the innovation management frame-work presented here suggests that a base setof innovation management measures isimplicitly present in the literature eventhough they may be fragmented in appearanceand presentation By pulling together theinnovation management framework fromdiverse sources this paper aims to bring suchissues into the open and identify relevantresearch gaps Table 2 can be viewed as thebasis for a balanced scorecard (Kaplan andNorton 1992) for innovation managementthat is as a balanced set of areas that need tobe measured in order to gain insight into anorganizationrsquos holistic ability to manage inno-vation Such multidimensional approaches tomeasurement have been found in other areasof management to be an improvement on sim-ple one-dimensional measures and to be ableto capture both short- and long-term aspectsof value creation in the firm (Phelps 2004)
We have identified a large number of meas-ures and approaches in a variety of innovationmanagement areas and we have constructed ageneric set of innovation management meas-urement areas to act as a framework for bal-anced measurement However in several ofthese areas measurement gaps have beenidentified These gaps are of two types valid-ity gaps and omission gaps Validity gaps arisewhere there is insufficient evidence that pro-posed measures actually do capture drivers oroutputs of innovation management for example
we have noted the objections to counts ofpatents or increasing expenditure on RampD beingused as measures of innovative organizationsSimilarly there is an absence of evidence thatthe large number of subjective perceptions ofinnovation management practices proposed(lsquowe do Arsquo lsquowe are good at Brsquo) actually relateto innovation management performance
Omission gaps occur where the importanceof an aspect of innovation management is sup-ported in the literature but measures for thisaspect are lacking Omission gaps are particu-larly prevalent in the elements of innovationmanagement such as knowledge managementinnovation strategy and commercializationthat do not feature strongly in the literature ontechnological and manufacturing-based inno-vation Another area traditionally not givenmuch emphasis in this literature is organiza-tion and culture which fortunately is bettertreated by the organizational behaviour litera-ture where a number of measures have beendeveloped Much of the current state of meas-urement practice can be traced back to the dis-ciplinersquos early manufacturing RampD and NPDfocus While product innovation is undoubt-edly important it is only one dimension of anorganizationrsquos innovation agenda Process andorganizational innovations are recognizedtoo as critical for competitiveness yet theseperspectives are inadequately represented inmeasurement terms
General areas of omission in this fieldrelate to an over-reliance on financial meas-ures rather than process measures for exam-ple the use of financial measures of portfoliooptimization but an absence of portfoliocapability measures a similar reliance oncodified knowledge such as patents to theexclusion of more intangible measures suchas tacit knowledge the measurement of levelsof resources or activities with no indication ofwhat an optimal level would be the measure-ment of drivers of innovation without meas-ures of whether these drivers are aligned witheach other and with firm strategy measures ofpresence that do not measure quality (eg theuse of dichotomous (yesno) measures that do
40 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
not indicate how well an action is implementedand measures of the presence of leadership(such as champions) but not of quality ofleadership) a general absence of measuresfor important properties of organizationalstructures such as flexibility and a lack ofmeasures of the match between structure andenvironment a technological and NPD bias toproject management measures and a relativeabsence of measures for service sectors apaucity of measures for internal communica-tions and a general lack of measures forcommercialization management ndash in particulararound marketing and sales capabilities forinnovative products and services All thesegaps provide the potential for further researchin innovation management measurement
The absence of an accepted framework ofinnovation management measures leads notonly to the gaps identified above but also toother problems in the literature One is that itis frequently unclear whether or not the met-rics used are of the researchersrsquo own devisingdrawn from the literature or are what are usedby the organizations being studied Nor is italways clear when metrics are devised orrecommended whether they are intended foruse in a research capacity or for managementtasks Further the measures proposed in theliterature often seem to be proposed abstractlywith little consideration given to the use ofmeasures as a management tool in the day-to-day context of managing innovation In theabsence of a comprehensive framework forinnovation management measurement organ-izations will inevitably resort to ad hoc andpartial metrics which can encourage wastefulpractice (eg measuring innovation managementcapability according to annual RampD spend)We hope that the framework constructed inthis paper will be useful in the constructionof comprehensive measures of innovationmanagement
Acknowledgements
The research reported here was supported bya grant from Cranfield School of Management
the authors gratefully acknowledge this supportFurther the authors are grateful to the editorsand two anonymous reviewers for their helpfuland insightful comments on previous versionsof this paper
Note
1 Corresponding author Telephone +44 (0) 207594 9137 e-mail radamsimperialacuk
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March 2006
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Cooper RG (1979b) Identifying industrial newproduct success Project NewProd Industrial Mar-keting Management 8 124ndash135
Cooper RG (1984) The strategyndashperformance linkin product innovation RampD Management 14 247ndash259
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Innovation management measurement A review
Cooper RG (1990) Stage-gate systems a new toolfor managing new products Business Horizons 3344ndash56
Cooper RG and Kleinschmidt EJ (1990) Newproduct success factors a comparison of lsquokillsrsquoversus successes and failures RampD Management20 47ndash64
Cooper RG and Kleinschmidt EJ (1995) Bench-marking the firmrsquos critical success factors in newproduct development Journal of Product Innova-tion Management 12 374ndash391
Cooper RG Edgett SJ and Kleinschmidt EJ(1999) New product portfolio management prac-tices and performance Journal of Product Innova-tion Management 16 333ndash351
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Cooper RG Edgett SJ and Kleinschmidt EJ (2004)Benchmarking best NPD practices Research-Technology Management 47 50ndash59
Cordero R (1990) The measurement of innovationperformance in the firm an overview ResearchPolicy 19 185ndash192
Cormican K and OrsquoSullivan D (2004) Auditingbest practice for effective product innovationmanagement Technovation 24 819ndash829
Coughlan P Chiesa V and Voss C (1994) Evalu-ating leadership as an enabler of innovation InProceedings 2nd International Product Develop-ment Management Conference GothenburgSweden 30ndash31 May Brussels European Institutefor Advanced Studies in Management
Covin JG and Slevin DP (1989) Strategic manage-ment of small firms in hostile and benign environ-ments Strategic Management Journal 10 75ndash87
Daft R (1978) A dual-core model of organizationalinnovation Academy of Management Journal 21193ndash210
Damanpour F (1991) Organizational innovation ameta-analysis of effects of determinants and mod-erators Academy of Management Journal 34 555ndash590
Damanpour F (1996) Organizational complexity andinnovation developing and testing multiple contin-gency models Management Science 42 693ndash716
Davis MC (1998) Knowledge management Infor-mation Strategy The Executiversquos Journal 15 11ndash22
De Brentani U (1991) Success factors in developingnew business services European Journal of Mar-keting 25 33ndash60
De Leede J Nijhof AH and Fisscher OA (1999)The myth of self managing teams a reflection onthe allocation of responsibilities between individu-als teams and the organisation Journal of BusinessEthics 21 203ndash215
Deeds DL (2001) The role of RampD intensitytechnical development and absorptive capacity increating entrepreneurial wealth in high technologystart-ups Journal of Engineering and TechnologyManagement 18 29ndash47
Denyer D and Neely A (2004) Introduction to spe-cial issue innovation and productivity performancein the UK International Journal of ManagementReviews 45 131ndash135
Di Benedetto CA (1996) Identifying the key suc-cess factors in new product launch Journal ofProduct Innovation Management 16 530ndash544
Dodgson M and Hinze S (2000) Indicators used tomeasure the innovation process defects and possi-ble remedies Research Evaluation 8 101ndash114
Dougherty D and Cohen M (1995) Product inno-vation in mature firms In Bowman E and KogutB (eds) Redesigning the Firm New York OxfordUniversity Press
Dougherty D and Hardy C (1996) Sustained prod-uct innovation in large mature organizations over-coming innovation-to-organization problemsAcademy of Management Journal 39 1120ndash1153
DTI (1998) An Audience With Innovation Innovationin Management London Department of Trade andIndustry
Dyer B and Song XM (1998) Innovation strategyand sanctioned conflict a new edge in innovationJournal of Product Innovation Management 15505ndash519
Ekvall G (1996) Organizational climate for creativ-ity and innovation European Journal of Work andOrganizational Psychology 5 105ndash123
Ernst H (2002) Success factors of new productdevelopment a review of the empirical literatureInternational Journal of Management Reviews 41ndash40
Farrukh C Phaal R Probert D Gregory M andWright J (2000) Developing a process for therelative valuation of RampD programmes RampDManagement 30 43ndash53
Frenkel A Maital S and Grupp H (2000) Meas-uring dynamic technical change a technometricapproach International Journal of TechnologyManagement 20 429ndash441
Galunic DC and Rodan S (1998) Resource recom-binations and the firm knowledge structures and
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the potential for Schumpeterian innovationStrategic Management Journal 19 1193ndash1201
Geisler E (1995) An integrated costndashperformancemodel of research-and-development evaluationOmega ndash International Journal of ManagementScience 23 281ndash294
Glaser BG and Strauss AL (1967) The Discoveryof Grounded Theory Strategies for QualitativeResearch London Aldine
Globe S Levy GW and Schwartz CM (1973)Key factors and events in the innovation processResearch Management 16 8ndash15
Goffin K and Pfeiffer R (1999) Innovation Man-agement in UK and German Manufacturing Com-panies London Anglo-German Foundation for theStudy of Industrial Society
Grant RM (1991) The resource-based theory ofcompetitive advantage implications for strategyformulation California Management Review 33114ndash135
Greve HR (2003) A behavioral theory of RampDexpenditures and innovations evidence fromshipbuilding Academy of Management Journal 46685ndash702
Griffin A (1997) PDMA research on new productdevelopment practices updating trends and bench-marking best practices Journal of Product Innova-tion Management 14 429ndash458
Griffin A and Page AL (1993) An interim reporton measuring product development success andfailure Journal of Product Innovation Manage-ment 10 291ndash308
Griliches Z (1990) Patent statistics as economicindicators a survey Journal of Economic Litera-ture 28 1661ndash1707
Hall DL and Nauda A (1990) An interactiveapproach for selecting IRampD projects IEEE Trans-actions on Engineering Management 37 126ndash133
Hauser JR and Zettelmeyer F (1997) Metrics toevaluate RDampE Research-Technology Manage-ment 40 32ndash38
Henriksen AD and Traynor AJ (1999) A practicalRampD project-selection scoring tool IEEE Trans-actions on Engineering Management 46 158ndash170
Hipp C and Grupp H (2005) Innovation in theservice sector the demand for service specific-innovation measurement concepts and typologiesResearch Policy 34 517ndash535
Holbek J (1988) The innovation design dilemmasome notes on its relevance and solutions InGroslashnhaug K and Kaufmann G (eds) Innovation
A Cross-Disciplinary Perspective NorwegianUniversity Press pp 253ndash277
Hope Hailey V (2001) Breaking the mould Innova-tion as a strategy for corporate renewal Inter-national Journal of Human Resource Management12 1126ndash1140
Hull R Coombs R and Peltu M (2000) Know-ledge management practices for innovation anaudit tool for improvement International Journalof Technology Management 20 633ndash656
Hultink EJ Hart S Robben HSJ and Griffin A(2000) Launch decisions and new product successan empirical comparison of consumer and indus-trial products Journal of Product Innovation Man-agement 17 5ndash23
Jassawalla AR and Sashittal HC (1999) Buildingcollaborative cross-functional new product teamsAcademy of Management Executive 13 50ndash63
Jenkins S Forbes S Durrani TS and BanerjeeSK (1997) Managing the product developmentprocess 1 An assessment International Journal ofTechnology Management 13 359ndash378
Kaplan RS and Norton DP (1992) The balancedscorecard ndash measures that drive performance HarvardBusiness Review JanuaryndashFebruary 71ndash79
Keller RT (1986) Predictors of performance ofproject groups in RampD organizations Academy ofManagement Journal 29 715ndash726
Kelm KM Narayanan VK and Pinches GE (1995)Shareholder value creation during research-and-development innovation and commercialization stagesAcademy of Management Journal 38 770ndash786
Kerssens-van Drongelen IC and Bilderbeek J(1999) RampD performance measurement morethan choosing a set of metrics RampD Management29 35ndash46
Kerssens-van Drongelen IC and de Weerd-Nederhof PC (1999) The use of performancemeasurement tools for balancing short- and long-term NPD performance International Journal ofInnovation Management 3 397ndash426
Kessler EH and Chakrabarti AK (1996) Innova-tion speed a conceptual model of context anteced-ents and outcomes Academy of ManagementReview 21 1143ndash1191
Kim B and Oh H (2002) An effective RampD per-formance measurement system survey of KoreanRampD researchers Omega ndash International Journalof Management Science 30 19ndash31
Kim J and Wilemon D (2002) Strategic issues inmanaging innovationrsquos fuzzy front-end EuropeanJournal of Innovation Management 5 27ndash39
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Innovation management measurement A review
Kimberly JR (1981) Managerial innovation InNystrom PC and Starbuck WH (eds) Handbookof Organizational Design Vol 1 New YorkOxford University Press pp 84ndash104
King N (1992) Modelling the innovation process anempirical comparison of approaches Journal ofOccupational and Organizational Psychology 6589ndash100
Kirton MJ (1976) Adaptors and innovators adescription and measure Journal of Applied Psy-chology 61 622ndash629
Kivimaumlki M Kuk G Elovainio M Thomson LKalliomaumlki-Levanto T and Heikkilauml A (1997)The team climate inventory (TCI) ndash four or fivefactors Testing the structure of TCI in samples oflow and high complexity jobs Journal of Occupa-tional and Organizational Psychology 70 375ndash389
Kivimaumlki M Lansisalmi H Elovainio M Heik-kila A Lindstrom K Harisalo R Sipila K andPuolimatka L (2000) Communication as a deter-minant of organizational innovation RampD Man-agement 30 33ndash42
Kleinknecht A (1987) Measuring RampD in smallfirms how much are we missing Journal of Indus-trial Economics 36 253ndash256
Koen P Ajamian G Burkart R Clamen ADavidson J DrsquoAmore R Elkins C Herald KIncorvia M Johnson A Karol R Seibert RSlavejkov A and Wagner K (2001) Providingclarity and a common language to the lsquofuzzy front endrsquoResearch-Technology Management 44 46ndash55
Koput K (1997) A chaotic model of innovativesearch some answers many questions Organiza-tion Science 8 528ndash542
Lawrence PR and Lorsch JW (1967) Organizationand Environment Harvard MA Harvard Univer-sity Press
Lee M Son B and Lee H (1996) Measuring RampDeffectiveness in Korean companies Research-Technology Management 39 28ndash31
Leonard D and Sensiper S (1998) The role of tacitknowledge in group innovation California Man-agement Review 40 112ndash132
Leseure M Birdi K Bauer J Denyer D andNeely A (2004) Adoption of Promising PracticeA Systematic Review of the Literature LondonAdvanced Institute of Management Research
Li HY and Atuahene-Gima K (2001) Productinnovation strategy and the performance of newtechnology ventures in China Academy of Man-agement Journal 44 1123ndash1134
Liao J Welsch H and Stoica M (2003) Organiza-tional absorptive capacity and responsivenessan empirical investigation of growth-orientedSMEs Entrepreneurship Theory and Practice 2863ndash86
Linstone HA and Turoff M (eds) (2002) The Del-phi Method Techniques and Applications httpwwwisnjitedupubsdelphibook
Loch C Stein L and Terwiesch C (1996) Meas-uring development performance in the electronicsindustry Journal of Product Innovation Manage-ment 13 3ndash20
Mathisen GE and Einarsen S (2004) A review ofinstruments assessing creative and innovative envi-ronments within organizations Creativity ResearchJournal 16 119ndash140
Maylor H (2001) Assessing the relationshipbetween practice changes and process improve-ment in new product development Omega ndashInternational Journal of Management Science 2985ndash96
McAdam RMS (1999) The process of knowledgemanagement within organizations a critical assess-ment of both theory and practice Knowledge andProcess Management 6 101ndash113
McManus RJ Wilson S Delaney BC Fitzmau-rice DA Hyde CJ Tobias RS Jowett S andHobbs FDR (1998) Review of the usefulness ofcontacting other experts when conducting a litera-ture search for systematic reviews British MedicalJournal 317 1562ndash1563
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Miller D and Friesen PH (1982) Innovation inconservative and entrepreneurial firms two modelsof strategic momentum Strategic ManagementJournal 3 1ndash24
Mintzberg H (1978) Patterns in strategy formationManagement Science 24 934ndash948
Mitroff I (1987) Business Not As Usual Rethinkingour Individual Corporate and Industrial Strategiesfor Global Competition London Jossey-Bass
Moenaert RK De Meyer A Souder WE andDeschoolmeester D (1995) RampDMarketing com-munication during the fuzzy front-end IEEETransactions on Engineering Management 42243ndash257
Neely A and Hii J (1998) Innovation and BusinessPerformance A Literature Review Report producedfor Government Office for the Eastern RegionCambridge The Judge Institute of ManagementStudies University of Cambridge
copy Blackwell Publishing Ltd 2006 45
March 2006
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OrsquoReilly CA and Tushman ML (1997) Using cul-ture for strategic advantage promoting innovationthrough social control In Tushman ML andAnderson P (eds) Managing Strategic Innovationand Change A Collection of Readings New YorkOxford University Press pp 200ndash216
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Pakes A and Griliches Z (1980) Patents and RampDat the firm level a first report Economic Letters 5377ndash381
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Rickards T (1991) Innovation and creativity treesand pathways RampD Management 21 97ndash108
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Innovation management measurement A review
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copy Blackwell Publishing Ltd 2006 47
March 2006
extension Academy of Management Review 27185
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Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
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Innovation management measurement A review
intentions of an organizationrsquos competitors(Calantone and di Benedetto 1988) Thethemes of proficiency of personnel in this area(eg Atuahene-Gima 1995 Cebon and New-ton 1999) of adherence to a commercializa-tion schedule (eg Griffin and Page 1993) andof formal post-launch reviews (Atuahene-Gima 1995 von Zedtwitz 2002) can also befound in the literature
Even in the work that addresses post-project reviews very little attention is directedtowards measuring innovation launch orcommercialization However this comes aslittle surprise as Hultink et al (2000) recentlyobserved that little work has been done in thearea perhaps because at least in the innova-tion literature launch activities appear to beconsidered the domain of other specialistsparticularly marketers and the process is seenas separate from innovation In their studythey investigated launch decisions associatedwith success for consumer and business-to-business products Much of the literature thatconsiders launch and commercialization doesso from the viewpoint of the adopter andassesses rates of adoption and diffusion ofinnovations over time across populations(Kessler and Chakrabarti 1996 Van DenBulte 2000)
The area of commercialization appears tobe the least developed of the issues involvedin innovation management This is a huge gapbecause without this last step the previoussteps of assembling inputs project manage-ment etc will not result in a commerciallyviable outcome for the firm We believe thatthis area of innovation is in urgent need offurther development from both theory andmeasurement viewpoints
Discussion
Innovation management measurement is acritical discipline for both academics andpractitioners The capacity of organizations toinnovate is determined by multiple factors thatrelate both to their own internal organizationand to their market environment (Rothwell
et al 1974) and the task of generating andthen converting ideas into usable and market-able products requires high levels of inter-functional co-ordination and integration Thispaper opened with the general observationthat innovation measurement does not appearto take place routinely within managementpractice and that where it does it tends tofocus on output measures Further from therelatively small number of empirical studiesof measurement in practice measurement ofinnovation management appears to be under-taken infrequently in an ad hoc fashion andrelies on dated unbalanced or under-specifiedmodels of the innovation management phe-nomenon This suggests that a large part ofthe contemporary conceptualization of theinnovation management phenomenon is over-looked in practitionersrsquo measurement prac-tices and consequently that opportunities forthe more efficient and effective managementof the innovation process are not realizedSome possible reasons for this state of affairsare failure of academics to communicate ade-quately inconsistency inaccessibility andcomplexity of measures and poor synthesisand packaging
Following a review and synthesis of theliterature we proposed a seven-dimensionalconceptualization of the innovation manage-ment phenomenon and applied it to an exam-ination of the measurement problem Throughthe application of this framework to their ownparticular context it is suggested that practi-tioners will be able to conduct an evaluationof their own innovation management activityidentify gaps weaknesses or deficiencies andalso improvement potential Further it ishoped that organizations applying the frame-work will be able to tease out areas whereinnovation is only nominally adopted in theirprocesses and identify areas where attentionand resources might be focused
From the perspective of its management itis no longer sufficient to treat innovation as alinear process where resources are channelledat one end from which emerges a new prod-uct or process The measurement framework
copy Blackwell Publishing Ltd 2006 39
March 2006
presented in Table 2 shows the breadth andvariety of elements of innovation managementthat ideally need to be measured There havebeen several studies that have investigated thelimitations of various approaches to measure-ment (eg Werner and Souder 1997) and ofspecific measures (eg Trajtenberg 1990) asthey relate to the practice of innovation Thechoice of an appropriate RampD measurementmetric depends on the userrsquos needs in terms ofcomprehensiveness of measurement type ofRampD being measured available data andamount of effort the user can afford to allocateto the exercise Nonetheless the commonciting across various papers of the measuresnoted in the innovation management frame-work presented here suggests that a base setof innovation management measures isimplicitly present in the literature eventhough they may be fragmented in appearanceand presentation By pulling together theinnovation management framework fromdiverse sources this paper aims to bring suchissues into the open and identify relevantresearch gaps Table 2 can be viewed as thebasis for a balanced scorecard (Kaplan andNorton 1992) for innovation managementthat is as a balanced set of areas that need tobe measured in order to gain insight into anorganizationrsquos holistic ability to manage inno-vation Such multidimensional approaches tomeasurement have been found in other areasof management to be an improvement on sim-ple one-dimensional measures and to be ableto capture both short- and long-term aspectsof value creation in the firm (Phelps 2004)
We have identified a large number of meas-ures and approaches in a variety of innovationmanagement areas and we have constructed ageneric set of innovation management meas-urement areas to act as a framework for bal-anced measurement However in several ofthese areas measurement gaps have beenidentified These gaps are of two types valid-ity gaps and omission gaps Validity gaps arisewhere there is insufficient evidence that pro-posed measures actually do capture drivers oroutputs of innovation management for example
we have noted the objections to counts ofpatents or increasing expenditure on RampD beingused as measures of innovative organizationsSimilarly there is an absence of evidence thatthe large number of subjective perceptions ofinnovation management practices proposed(lsquowe do Arsquo lsquowe are good at Brsquo) actually relateto innovation management performance
Omission gaps occur where the importanceof an aspect of innovation management is sup-ported in the literature but measures for thisaspect are lacking Omission gaps are particu-larly prevalent in the elements of innovationmanagement such as knowledge managementinnovation strategy and commercializationthat do not feature strongly in the literature ontechnological and manufacturing-based inno-vation Another area traditionally not givenmuch emphasis in this literature is organiza-tion and culture which fortunately is bettertreated by the organizational behaviour litera-ture where a number of measures have beendeveloped Much of the current state of meas-urement practice can be traced back to the dis-ciplinersquos early manufacturing RampD and NPDfocus While product innovation is undoubt-edly important it is only one dimension of anorganizationrsquos innovation agenda Process andorganizational innovations are recognizedtoo as critical for competitiveness yet theseperspectives are inadequately represented inmeasurement terms
General areas of omission in this fieldrelate to an over-reliance on financial meas-ures rather than process measures for exam-ple the use of financial measures of portfoliooptimization but an absence of portfoliocapability measures a similar reliance oncodified knowledge such as patents to theexclusion of more intangible measures suchas tacit knowledge the measurement of levelsof resources or activities with no indication ofwhat an optimal level would be the measure-ment of drivers of innovation without meas-ures of whether these drivers are aligned witheach other and with firm strategy measures ofpresence that do not measure quality (eg theuse of dichotomous (yesno) measures that do
40 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
not indicate how well an action is implementedand measures of the presence of leadership(such as champions) but not of quality ofleadership) a general absence of measuresfor important properties of organizationalstructures such as flexibility and a lack ofmeasures of the match between structure andenvironment a technological and NPD bias toproject management measures and a relativeabsence of measures for service sectors apaucity of measures for internal communica-tions and a general lack of measures forcommercialization management ndash in particulararound marketing and sales capabilities forinnovative products and services All thesegaps provide the potential for further researchin innovation management measurement
The absence of an accepted framework ofinnovation management measures leads notonly to the gaps identified above but also toother problems in the literature One is that itis frequently unclear whether or not the met-rics used are of the researchersrsquo own devisingdrawn from the literature or are what are usedby the organizations being studied Nor is italways clear when metrics are devised orrecommended whether they are intended foruse in a research capacity or for managementtasks Further the measures proposed in theliterature often seem to be proposed abstractlywith little consideration given to the use ofmeasures as a management tool in the day-to-day context of managing innovation In theabsence of a comprehensive framework forinnovation management measurement organ-izations will inevitably resort to ad hoc andpartial metrics which can encourage wastefulpractice (eg measuring innovation managementcapability according to annual RampD spend)We hope that the framework constructed inthis paper will be useful in the constructionof comprehensive measures of innovationmanagement
Acknowledgements
The research reported here was supported bya grant from Cranfield School of Management
the authors gratefully acknowledge this supportFurther the authors are grateful to the editorsand two anonymous reviewers for their helpfuland insightful comments on previous versionsof this paper
Note
1 Corresponding author Telephone +44 (0) 207594 9137 e-mail radamsimperialacuk
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the potential for Schumpeterian innovationStrategic Management Journal 19 1193ndash1201
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Glaser BG and Strauss AL (1967) The Discoveryof Grounded Theory Strategies for QualitativeResearch London Aldine
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Goffin K and Pfeiffer R (1999) Innovation Man-agement in UK and German Manufacturing Com-panies London Anglo-German Foundation for theStudy of Industrial Society
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Griffin A (1997) PDMA research on new productdevelopment practices updating trends and bench-marking best practices Journal of Product Innova-tion Management 14 429ndash458
Griffin A and Page AL (1993) An interim reporton measuring product development success andfailure Journal of Product Innovation Manage-ment 10 291ndash308
Griliches Z (1990) Patent statistics as economicindicators a survey Journal of Economic Litera-ture 28 1661ndash1707
Hall DL and Nauda A (1990) An interactiveapproach for selecting IRampD projects IEEE Trans-actions on Engineering Management 37 126ndash133
Hauser JR and Zettelmeyer F (1997) Metrics toevaluate RDampE Research-Technology Manage-ment 40 32ndash38
Henriksen AD and Traynor AJ (1999) A practicalRampD project-selection scoring tool IEEE Trans-actions on Engineering Management 46 158ndash170
Hipp C and Grupp H (2005) Innovation in theservice sector the demand for service specific-innovation measurement concepts and typologiesResearch Policy 34 517ndash535
Holbek J (1988) The innovation design dilemmasome notes on its relevance and solutions InGroslashnhaug K and Kaufmann G (eds) Innovation
A Cross-Disciplinary Perspective NorwegianUniversity Press pp 253ndash277
Hope Hailey V (2001) Breaking the mould Innova-tion as a strategy for corporate renewal Inter-national Journal of Human Resource Management12 1126ndash1140
Hull R Coombs R and Peltu M (2000) Know-ledge management practices for innovation anaudit tool for improvement International Journalof Technology Management 20 633ndash656
Hultink EJ Hart S Robben HSJ and Griffin A(2000) Launch decisions and new product successan empirical comparison of consumer and indus-trial products Journal of Product Innovation Man-agement 17 5ndash23
Jassawalla AR and Sashittal HC (1999) Buildingcollaborative cross-functional new product teamsAcademy of Management Executive 13 50ndash63
Jenkins S Forbes S Durrani TS and BanerjeeSK (1997) Managing the product developmentprocess 1 An assessment International Journal ofTechnology Management 13 359ndash378
Kaplan RS and Norton DP (1992) The balancedscorecard ndash measures that drive performance HarvardBusiness Review JanuaryndashFebruary 71ndash79
Keller RT (1986) Predictors of performance ofproject groups in RampD organizations Academy ofManagement Journal 29 715ndash726
Kelm KM Narayanan VK and Pinches GE (1995)Shareholder value creation during research-and-development innovation and commercialization stagesAcademy of Management Journal 38 770ndash786
Kerssens-van Drongelen IC and Bilderbeek J(1999) RampD performance measurement morethan choosing a set of metrics RampD Management29 35ndash46
Kerssens-van Drongelen IC and de Weerd-Nederhof PC (1999) The use of performancemeasurement tools for balancing short- and long-term NPD performance International Journal ofInnovation Management 3 397ndash426
Kessler EH and Chakrabarti AK (1996) Innova-tion speed a conceptual model of context anteced-ents and outcomes Academy of ManagementReview 21 1143ndash1191
Kim B and Oh H (2002) An effective RampD per-formance measurement system survey of KoreanRampD researchers Omega ndash International Journalof Management Science 30 19ndash31
Kim J and Wilemon D (2002) Strategic issues inmanaging innovationrsquos fuzzy front-end EuropeanJournal of Innovation Management 5 27ndash39
44 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Kimberly JR (1981) Managerial innovation InNystrom PC and Starbuck WH (eds) Handbookof Organizational Design Vol 1 New YorkOxford University Press pp 84ndash104
King N (1992) Modelling the innovation process anempirical comparison of approaches Journal ofOccupational and Organizational Psychology 6589ndash100
Kirton MJ (1976) Adaptors and innovators adescription and measure Journal of Applied Psy-chology 61 622ndash629
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Kivimaumlki M Lansisalmi H Elovainio M Heik-kila A Lindstrom K Harisalo R Sipila K andPuolimatka L (2000) Communication as a deter-minant of organizational innovation RampD Man-agement 30 33ndash42
Kleinknecht A (1987) Measuring RampD in smallfirms how much are we missing Journal of Indus-trial Economics 36 253ndash256
Koen P Ajamian G Burkart R Clamen ADavidson J DrsquoAmore R Elkins C Herald KIncorvia M Johnson A Karol R Seibert RSlavejkov A and Wagner K (2001) Providingclarity and a common language to the lsquofuzzy front endrsquoResearch-Technology Management 44 46ndash55
Koput K (1997) A chaotic model of innovativesearch some answers many questions Organiza-tion Science 8 528ndash542
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copy Blackwell Publishing Ltd 2006 45
March 2006
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Innovation management measurement A review
empirical investigation of nonprofit human serviceorganizations (HSOS) Administration in SocialWork 22 1ndash21
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copy Blackwell Publishing Ltd 2006 47
March 2006
extension Academy of Management Review 27185
Zaltman G Duncan R and Holbek J (1973) Inno-vations and Organizations New York John Wiley
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Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
copy Blackwell Publishing Ltd 2006 39
March 2006
presented in Table 2 shows the breadth andvariety of elements of innovation managementthat ideally need to be measured There havebeen several studies that have investigated thelimitations of various approaches to measure-ment (eg Werner and Souder 1997) and ofspecific measures (eg Trajtenberg 1990) asthey relate to the practice of innovation Thechoice of an appropriate RampD measurementmetric depends on the userrsquos needs in terms ofcomprehensiveness of measurement type ofRampD being measured available data andamount of effort the user can afford to allocateto the exercise Nonetheless the commonciting across various papers of the measuresnoted in the innovation management frame-work presented here suggests that a base setof innovation management measures isimplicitly present in the literature eventhough they may be fragmented in appearanceand presentation By pulling together theinnovation management framework fromdiverse sources this paper aims to bring suchissues into the open and identify relevantresearch gaps Table 2 can be viewed as thebasis for a balanced scorecard (Kaplan andNorton 1992) for innovation managementthat is as a balanced set of areas that need tobe measured in order to gain insight into anorganizationrsquos holistic ability to manage inno-vation Such multidimensional approaches tomeasurement have been found in other areasof management to be an improvement on sim-ple one-dimensional measures and to be ableto capture both short- and long-term aspectsof value creation in the firm (Phelps 2004)
We have identified a large number of meas-ures and approaches in a variety of innovationmanagement areas and we have constructed ageneric set of innovation management meas-urement areas to act as a framework for bal-anced measurement However in several ofthese areas measurement gaps have beenidentified These gaps are of two types valid-ity gaps and omission gaps Validity gaps arisewhere there is insufficient evidence that pro-posed measures actually do capture drivers oroutputs of innovation management for example
we have noted the objections to counts ofpatents or increasing expenditure on RampD beingused as measures of innovative organizationsSimilarly there is an absence of evidence thatthe large number of subjective perceptions ofinnovation management practices proposed(lsquowe do Arsquo lsquowe are good at Brsquo) actually relateto innovation management performance
Omission gaps occur where the importanceof an aspect of innovation management is sup-ported in the literature but measures for thisaspect are lacking Omission gaps are particu-larly prevalent in the elements of innovationmanagement such as knowledge managementinnovation strategy and commercializationthat do not feature strongly in the literature ontechnological and manufacturing-based inno-vation Another area traditionally not givenmuch emphasis in this literature is organiza-tion and culture which fortunately is bettertreated by the organizational behaviour litera-ture where a number of measures have beendeveloped Much of the current state of meas-urement practice can be traced back to the dis-ciplinersquos early manufacturing RampD and NPDfocus While product innovation is undoubt-edly important it is only one dimension of anorganizationrsquos innovation agenda Process andorganizational innovations are recognizedtoo as critical for competitiveness yet theseperspectives are inadequately represented inmeasurement terms
General areas of omission in this fieldrelate to an over-reliance on financial meas-ures rather than process measures for exam-ple the use of financial measures of portfoliooptimization but an absence of portfoliocapability measures a similar reliance oncodified knowledge such as patents to theexclusion of more intangible measures suchas tacit knowledge the measurement of levelsof resources or activities with no indication ofwhat an optimal level would be the measure-ment of drivers of innovation without meas-ures of whether these drivers are aligned witheach other and with firm strategy measures ofpresence that do not measure quality (eg theuse of dichotomous (yesno) measures that do
40 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
not indicate how well an action is implementedand measures of the presence of leadership(such as champions) but not of quality ofleadership) a general absence of measuresfor important properties of organizationalstructures such as flexibility and a lack ofmeasures of the match between structure andenvironment a technological and NPD bias toproject management measures and a relativeabsence of measures for service sectors apaucity of measures for internal communica-tions and a general lack of measures forcommercialization management ndash in particulararound marketing and sales capabilities forinnovative products and services All thesegaps provide the potential for further researchin innovation management measurement
The absence of an accepted framework ofinnovation management measures leads notonly to the gaps identified above but also toother problems in the literature One is that itis frequently unclear whether or not the met-rics used are of the researchersrsquo own devisingdrawn from the literature or are what are usedby the organizations being studied Nor is italways clear when metrics are devised orrecommended whether they are intended foruse in a research capacity or for managementtasks Further the measures proposed in theliterature often seem to be proposed abstractlywith little consideration given to the use ofmeasures as a management tool in the day-to-day context of managing innovation In theabsence of a comprehensive framework forinnovation management measurement organ-izations will inevitably resort to ad hoc andpartial metrics which can encourage wastefulpractice (eg measuring innovation managementcapability according to annual RampD spend)We hope that the framework constructed inthis paper will be useful in the constructionof comprehensive measures of innovationmanagement
Acknowledgements
The research reported here was supported bya grant from Cranfield School of Management
the authors gratefully acknowledge this supportFurther the authors are grateful to the editorsand two anonymous reviewers for their helpfuland insightful comments on previous versionsof this paper
Note
1 Corresponding author Telephone +44 (0) 207594 9137 e-mail radamsimperialacuk
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the potential for Schumpeterian innovationStrategic Management Journal 19 1193ndash1201
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Glaser BG and Strauss AL (1967) The Discoveryof Grounded Theory Strategies for QualitativeResearch London Aldine
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Goffin K and Pfeiffer R (1999) Innovation Man-agement in UK and German Manufacturing Com-panies London Anglo-German Foundation for theStudy of Industrial Society
Grant RM (1991) The resource-based theory ofcompetitive advantage implications for strategyformulation California Management Review 33114ndash135
Greve HR (2003) A behavioral theory of RampDexpenditures and innovations evidence fromshipbuilding Academy of Management Journal 46685ndash702
Griffin A (1997) PDMA research on new productdevelopment practices updating trends and bench-marking best practices Journal of Product Innova-tion Management 14 429ndash458
Griffin A and Page AL (1993) An interim reporton measuring product development success andfailure Journal of Product Innovation Manage-ment 10 291ndash308
Griliches Z (1990) Patent statistics as economicindicators a survey Journal of Economic Litera-ture 28 1661ndash1707
Hall DL and Nauda A (1990) An interactiveapproach for selecting IRampD projects IEEE Trans-actions on Engineering Management 37 126ndash133
Hauser JR and Zettelmeyer F (1997) Metrics toevaluate RDampE Research-Technology Manage-ment 40 32ndash38
Henriksen AD and Traynor AJ (1999) A practicalRampD project-selection scoring tool IEEE Trans-actions on Engineering Management 46 158ndash170
Hipp C and Grupp H (2005) Innovation in theservice sector the demand for service specific-innovation measurement concepts and typologiesResearch Policy 34 517ndash535
Holbek J (1988) The innovation design dilemmasome notes on its relevance and solutions InGroslashnhaug K and Kaufmann G (eds) Innovation
A Cross-Disciplinary Perspective NorwegianUniversity Press pp 253ndash277
Hope Hailey V (2001) Breaking the mould Innova-tion as a strategy for corporate renewal Inter-national Journal of Human Resource Management12 1126ndash1140
Hull R Coombs R and Peltu M (2000) Know-ledge management practices for innovation anaudit tool for improvement International Journalof Technology Management 20 633ndash656
Hultink EJ Hart S Robben HSJ and Griffin A(2000) Launch decisions and new product successan empirical comparison of consumer and indus-trial products Journal of Product Innovation Man-agement 17 5ndash23
Jassawalla AR and Sashittal HC (1999) Buildingcollaborative cross-functional new product teamsAcademy of Management Executive 13 50ndash63
Jenkins S Forbes S Durrani TS and BanerjeeSK (1997) Managing the product developmentprocess 1 An assessment International Journal ofTechnology Management 13 359ndash378
Kaplan RS and Norton DP (1992) The balancedscorecard ndash measures that drive performance HarvardBusiness Review JanuaryndashFebruary 71ndash79
Keller RT (1986) Predictors of performance ofproject groups in RampD organizations Academy ofManagement Journal 29 715ndash726
Kelm KM Narayanan VK and Pinches GE (1995)Shareholder value creation during research-and-development innovation and commercialization stagesAcademy of Management Journal 38 770ndash786
Kerssens-van Drongelen IC and Bilderbeek J(1999) RampD performance measurement morethan choosing a set of metrics RampD Management29 35ndash46
Kerssens-van Drongelen IC and de Weerd-Nederhof PC (1999) The use of performancemeasurement tools for balancing short- and long-term NPD performance International Journal ofInnovation Management 3 397ndash426
Kessler EH and Chakrabarti AK (1996) Innova-tion speed a conceptual model of context anteced-ents and outcomes Academy of ManagementReview 21 1143ndash1191
Kim B and Oh H (2002) An effective RampD per-formance measurement system survey of KoreanRampD researchers Omega ndash International Journalof Management Science 30 19ndash31
Kim J and Wilemon D (2002) Strategic issues inmanaging innovationrsquos fuzzy front-end EuropeanJournal of Innovation Management 5 27ndash39
44 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Kimberly JR (1981) Managerial innovation InNystrom PC and Starbuck WH (eds) Handbookof Organizational Design Vol 1 New YorkOxford University Press pp 84ndash104
King N (1992) Modelling the innovation process anempirical comparison of approaches Journal ofOccupational and Organizational Psychology 6589ndash100
Kirton MJ (1976) Adaptors and innovators adescription and measure Journal of Applied Psy-chology 61 622ndash629
Kivimaumlki M Kuk G Elovainio M Thomson LKalliomaumlki-Levanto T and Heikkilauml A (1997)The team climate inventory (TCI) ndash four or fivefactors Testing the structure of TCI in samples oflow and high complexity jobs Journal of Occupa-tional and Organizational Psychology 70 375ndash389
Kivimaumlki M Lansisalmi H Elovainio M Heik-kila A Lindstrom K Harisalo R Sipila K andPuolimatka L (2000) Communication as a deter-minant of organizational innovation RampD Man-agement 30 33ndash42
Kleinknecht A (1987) Measuring RampD in smallfirms how much are we missing Journal of Indus-trial Economics 36 253ndash256
Koen P Ajamian G Burkart R Clamen ADavidson J DrsquoAmore R Elkins C Herald KIncorvia M Johnson A Karol R Seibert RSlavejkov A and Wagner K (2001) Providingclarity and a common language to the lsquofuzzy front endrsquoResearch-Technology Management 44 46ndash55
Koput K (1997) A chaotic model of innovativesearch some answers many questions Organiza-tion Science 8 528ndash542
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copy Blackwell Publishing Ltd 2006 45
March 2006
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Innovation management measurement A review
empirical investigation of nonprofit human serviceorganizations (HSOS) Administration in SocialWork 22 1ndash21
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Veryzer RW (1998) Discontinuous innovation andthe new product development process Journal ofProduct Innovation Management 15 304ndash321
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Von Zedtwitz M (2002) Organizational learningthrough post-project reviews in RampD RampD Man-agement 32 255ndash268
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West MA (1990) The social psychology of innova-tion in groups In West MA and Farr JL (eds)Innovation and Creativity at Work Psychologicaland Organizational Strategies Chichester UKJohn Wiley pp 309ndash333
West MA and Anderson NR (1996) Innovation intop management teams Journal of Applied Psychol-ogy 81 680ndash693
White A (2002) Enabling factors in the front end ofthe innovation process In Proceedings 9thInternational Product Development ManagementConference Sophia Antipolis France BrusselsEuropean Institute for Advanced Studies inManagement pp 879ndash887
Wolfe RA (1994) Organizational innovationreview critique and suggested research direc-tions Journal of Management Studies 31 405ndash431
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Zahra SA and George G (2002) Absorptivecapacity a review reconceptualization and
copy Blackwell Publishing Ltd 2006 47
March 2006
extension Academy of Management Review 27185
Zaltman G Duncan R and Holbek J (1973) Inno-vations and Organizations New York John Wiley
Zien KA and Buckler SA (1997) From experiencedreams to market crafting a culture of innovationJournal of Product Innovation Management 14274ndash287
Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
40 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
not indicate how well an action is implementedand measures of the presence of leadership(such as champions) but not of quality ofleadership) a general absence of measuresfor important properties of organizationalstructures such as flexibility and a lack ofmeasures of the match between structure andenvironment a technological and NPD bias toproject management measures and a relativeabsence of measures for service sectors apaucity of measures for internal communica-tions and a general lack of measures forcommercialization management ndash in particulararound marketing and sales capabilities forinnovative products and services All thesegaps provide the potential for further researchin innovation management measurement
The absence of an accepted framework ofinnovation management measures leads notonly to the gaps identified above but also toother problems in the literature One is that itis frequently unclear whether or not the met-rics used are of the researchersrsquo own devisingdrawn from the literature or are what are usedby the organizations being studied Nor is italways clear when metrics are devised orrecommended whether they are intended foruse in a research capacity or for managementtasks Further the measures proposed in theliterature often seem to be proposed abstractlywith little consideration given to the use ofmeasures as a management tool in the day-to-day context of managing innovation In theabsence of a comprehensive framework forinnovation management measurement organ-izations will inevitably resort to ad hoc andpartial metrics which can encourage wastefulpractice (eg measuring innovation managementcapability according to annual RampD spend)We hope that the framework constructed inthis paper will be useful in the constructionof comprehensive measures of innovationmanagement
Acknowledgements
The research reported here was supported bya grant from Cranfield School of Management
the authors gratefully acknowledge this supportFurther the authors are grateful to the editorsand two anonymous reviewers for their helpfuland insightful comments on previous versionsof this paper
Note
1 Corresponding author Telephone +44 (0) 207594 9137 e-mail radamsimperialacuk
References
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Davis MC (1998) Knowledge management Infor-mation Strategy The Executiversquos Journal 15 11ndash22
De Brentani U (1991) Success factors in developingnew business services European Journal of Mar-keting 25 33ndash60
De Leede J Nijhof AH and Fisscher OA (1999)The myth of self managing teams a reflection onthe allocation of responsibilities between individu-als teams and the organisation Journal of BusinessEthics 21 203ndash215
Deeds DL (2001) The role of RampD intensitytechnical development and absorptive capacity increating entrepreneurial wealth in high technologystart-ups Journal of Engineering and TechnologyManagement 18 29ndash47
Denyer D and Neely A (2004) Introduction to spe-cial issue innovation and productivity performancein the UK International Journal of ManagementReviews 45 131ndash135
Di Benedetto CA (1996) Identifying the key suc-cess factors in new product launch Journal ofProduct Innovation Management 16 530ndash544
Dodgson M and Hinze S (2000) Indicators used tomeasure the innovation process defects and possi-ble remedies Research Evaluation 8 101ndash114
Dougherty D and Cohen M (1995) Product inno-vation in mature firms In Bowman E and KogutB (eds) Redesigning the Firm New York OxfordUniversity Press
Dougherty D and Hardy C (1996) Sustained prod-uct innovation in large mature organizations over-coming innovation-to-organization problemsAcademy of Management Journal 39 1120ndash1153
DTI (1998) An Audience With Innovation Innovationin Management London Department of Trade andIndustry
Dyer B and Song XM (1998) Innovation strategyand sanctioned conflict a new edge in innovationJournal of Product Innovation Management 15505ndash519
Ekvall G (1996) Organizational climate for creativ-ity and innovation European Journal of Work andOrganizational Psychology 5 105ndash123
Ernst H (2002) Success factors of new productdevelopment a review of the empirical literatureInternational Journal of Management Reviews 41ndash40
Farrukh C Phaal R Probert D Gregory M andWright J (2000) Developing a process for therelative valuation of RampD programmes RampDManagement 30 43ndash53
Frenkel A Maital S and Grupp H (2000) Meas-uring dynamic technical change a technometricapproach International Journal of TechnologyManagement 20 429ndash441
Galunic DC and Rodan S (1998) Resource recom-binations and the firm knowledge structures and
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the potential for Schumpeterian innovationStrategic Management Journal 19 1193ndash1201
Geisler E (1995) An integrated costndashperformancemodel of research-and-development evaluationOmega ndash International Journal of ManagementScience 23 281ndash294
Glaser BG and Strauss AL (1967) The Discoveryof Grounded Theory Strategies for QualitativeResearch London Aldine
Globe S Levy GW and Schwartz CM (1973)Key factors and events in the innovation processResearch Management 16 8ndash15
Goffin K and Pfeiffer R (1999) Innovation Man-agement in UK and German Manufacturing Com-panies London Anglo-German Foundation for theStudy of Industrial Society
Grant RM (1991) The resource-based theory ofcompetitive advantage implications for strategyformulation California Management Review 33114ndash135
Greve HR (2003) A behavioral theory of RampDexpenditures and innovations evidence fromshipbuilding Academy of Management Journal 46685ndash702
Griffin A (1997) PDMA research on new productdevelopment practices updating trends and bench-marking best practices Journal of Product Innova-tion Management 14 429ndash458
Griffin A and Page AL (1993) An interim reporton measuring product development success andfailure Journal of Product Innovation Manage-ment 10 291ndash308
Griliches Z (1990) Patent statistics as economicindicators a survey Journal of Economic Litera-ture 28 1661ndash1707
Hall DL and Nauda A (1990) An interactiveapproach for selecting IRampD projects IEEE Trans-actions on Engineering Management 37 126ndash133
Hauser JR and Zettelmeyer F (1997) Metrics toevaluate RDampE Research-Technology Manage-ment 40 32ndash38
Henriksen AD and Traynor AJ (1999) A practicalRampD project-selection scoring tool IEEE Trans-actions on Engineering Management 46 158ndash170
Hipp C and Grupp H (2005) Innovation in theservice sector the demand for service specific-innovation measurement concepts and typologiesResearch Policy 34 517ndash535
Holbek J (1988) The innovation design dilemmasome notes on its relevance and solutions InGroslashnhaug K and Kaufmann G (eds) Innovation
A Cross-Disciplinary Perspective NorwegianUniversity Press pp 253ndash277
Hope Hailey V (2001) Breaking the mould Innova-tion as a strategy for corporate renewal Inter-national Journal of Human Resource Management12 1126ndash1140
Hull R Coombs R and Peltu M (2000) Know-ledge management practices for innovation anaudit tool for improvement International Journalof Technology Management 20 633ndash656
Hultink EJ Hart S Robben HSJ and Griffin A(2000) Launch decisions and new product successan empirical comparison of consumer and indus-trial products Journal of Product Innovation Man-agement 17 5ndash23
Jassawalla AR and Sashittal HC (1999) Buildingcollaborative cross-functional new product teamsAcademy of Management Executive 13 50ndash63
Jenkins S Forbes S Durrani TS and BanerjeeSK (1997) Managing the product developmentprocess 1 An assessment International Journal ofTechnology Management 13 359ndash378
Kaplan RS and Norton DP (1992) The balancedscorecard ndash measures that drive performance HarvardBusiness Review JanuaryndashFebruary 71ndash79
Keller RT (1986) Predictors of performance ofproject groups in RampD organizations Academy ofManagement Journal 29 715ndash726
Kelm KM Narayanan VK and Pinches GE (1995)Shareholder value creation during research-and-development innovation and commercialization stagesAcademy of Management Journal 38 770ndash786
Kerssens-van Drongelen IC and Bilderbeek J(1999) RampD performance measurement morethan choosing a set of metrics RampD Management29 35ndash46
Kerssens-van Drongelen IC and de Weerd-Nederhof PC (1999) The use of performancemeasurement tools for balancing short- and long-term NPD performance International Journal ofInnovation Management 3 397ndash426
Kessler EH and Chakrabarti AK (1996) Innova-tion speed a conceptual model of context anteced-ents and outcomes Academy of ManagementReview 21 1143ndash1191
Kim B and Oh H (2002) An effective RampD per-formance measurement system survey of KoreanRampD researchers Omega ndash International Journalof Management Science 30 19ndash31
Kim J and Wilemon D (2002) Strategic issues inmanaging innovationrsquos fuzzy front-end EuropeanJournal of Innovation Management 5 27ndash39
44 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Kimberly JR (1981) Managerial innovation InNystrom PC and Starbuck WH (eds) Handbookof Organizational Design Vol 1 New YorkOxford University Press pp 84ndash104
King N (1992) Modelling the innovation process anempirical comparison of approaches Journal ofOccupational and Organizational Psychology 6589ndash100
Kirton MJ (1976) Adaptors and innovators adescription and measure Journal of Applied Psy-chology 61 622ndash629
Kivimaumlki M Kuk G Elovainio M Thomson LKalliomaumlki-Levanto T and Heikkilauml A (1997)The team climate inventory (TCI) ndash four or fivefactors Testing the structure of TCI in samples oflow and high complexity jobs Journal of Occupa-tional and Organizational Psychology 70 375ndash389
Kivimaumlki M Lansisalmi H Elovainio M Heik-kila A Lindstrom K Harisalo R Sipila K andPuolimatka L (2000) Communication as a deter-minant of organizational innovation RampD Man-agement 30 33ndash42
Kleinknecht A (1987) Measuring RampD in smallfirms how much are we missing Journal of Indus-trial Economics 36 253ndash256
Koen P Ajamian G Burkart R Clamen ADavidson J DrsquoAmore R Elkins C Herald KIncorvia M Johnson A Karol R Seibert RSlavejkov A and Wagner K (2001) Providingclarity and a common language to the lsquofuzzy front endrsquoResearch-Technology Management 44 46ndash55
Koput K (1997) A chaotic model of innovativesearch some answers many questions Organiza-tion Science 8 528ndash542
Lawrence PR and Lorsch JW (1967) Organizationand Environment Harvard MA Harvard Univer-sity Press
Lee M Son B and Lee H (1996) Measuring RampDeffectiveness in Korean companies Research-Technology Management 39 28ndash31
Leonard D and Sensiper S (1998) The role of tacitknowledge in group innovation California Man-agement Review 40 112ndash132
Leseure M Birdi K Bauer J Denyer D andNeely A (2004) Adoption of Promising PracticeA Systematic Review of the Literature LondonAdvanced Institute of Management Research
Li HY and Atuahene-Gima K (2001) Productinnovation strategy and the performance of newtechnology ventures in China Academy of Man-agement Journal 44 1123ndash1134
Liao J Welsch H and Stoica M (2003) Organiza-tional absorptive capacity and responsivenessan empirical investigation of growth-orientedSMEs Entrepreneurship Theory and Practice 2863ndash86
Linstone HA and Turoff M (eds) (2002) The Del-phi Method Techniques and Applications httpwwwisnjitedupubsdelphibook
Loch C Stein L and Terwiesch C (1996) Meas-uring development performance in the electronicsindustry Journal of Product Innovation Manage-ment 13 3ndash20
Mathisen GE and Einarsen S (2004) A review ofinstruments assessing creative and innovative envi-ronments within organizations Creativity ResearchJournal 16 119ndash140
Maylor H (2001) Assessing the relationshipbetween practice changes and process improve-ment in new product development Omega ndashInternational Journal of Management Science 2985ndash96
McAdam RMS (1999) The process of knowledgemanagement within organizations a critical assess-ment of both theory and practice Knowledge andProcess Management 6 101ndash113
McManus RJ Wilson S Delaney BC Fitzmau-rice DA Hyde CJ Tobias RS Jowett S andHobbs FDR (1998) Review of the usefulness ofcontacting other experts when conducting a litera-ture search for systematic reviews British MedicalJournal 317 1562ndash1563
Miles RE and Snow CC (1978) Organization StrategyStructure and Process New York McGraw-Hill
Miller D and Friesen PH (1982) Innovation inconservative and entrepreneurial firms two modelsof strategic momentum Strategic ManagementJournal 3 1ndash24
Mintzberg H (1978) Patterns in strategy formationManagement Science 24 934ndash948
Mitroff I (1987) Business Not As Usual Rethinkingour Individual Corporate and Industrial Strategiesfor Global Competition London Jossey-Bass
Moenaert RK De Meyer A Souder WE andDeschoolmeester D (1995) RampDMarketing com-munication during the fuzzy front-end IEEETransactions on Engineering Management 42243ndash257
Neely A and Hii J (1998) Innovation and BusinessPerformance A Literature Review Report producedfor Government Office for the Eastern RegionCambridge The Judge Institute of ManagementStudies University of Cambridge
copy Blackwell Publishing Ltd 2006 45
March 2006
Nelson R and Winter G (1982) An EvolutionaryTheory of Economic Change Cambridge MABelknap Press
Nohria N and Gulati R (1996) Is slack good or badfor innovation Academy of Management Journal39 1245ndash1264
Nonaka I (1991) The knowledge-creating companyHarvard Business Review NovemberndashDecember96ndash104
Nonaka I and Takeuchi H (1995) The KnowledgeCreating Company How Japanese CompaniesCreate the Dynamics of Innovation New YorkOxford University Press
OrsquoBrien JP (2003) The capital structure implica-tions of pursuing a strategy of innovation StrategicManagement Journal 24 415ndash431
OrsquoReilly CA and Tushman ML (1997) Using cul-ture for strategic advantage promoting innovationthrough social control In Tushman ML andAnderson P (eds) Managing Strategic Innovationand Change A Collection of Readings New YorkOxford University Press pp 200ndash216
Oliver N Dewberry E and Dostaler I (1999) Newproduct development performance and practice aninternational benchmarking study in the consumerelectronics industry In Proceedings 6th Inter-national Product Development Management Confer-ence Cambridge UK Brussels European Institutefor Advanced Studies in Management
Pakes A and Griliches Z (1980) Patents and RampDat the firm level a first report Economic Letters 5377ndash381
Parthasarthy R and Hammond J (2002) Productinnovation input and outcome moderating effectsof the innovation process Journal of Engineeringand Technology Management 19 75ndash91
Patterson F (2003) Innovation potential indicatorAvailable at wwwoppcouk
Phelps B (2004) Smart Business Metrics MeasureWhat Really Counts and Manage What Makes theDifference London FT-Prentice Hall
Pinto JK and Prescott JE (1988) Changes in crit-ical success factors over the stages in the projectlife cycle Journal of Management 14 5ndash18
Pitt M and Clarke K (1999) Competing on compe-tence a knowledge perspective on the managementof strategic innovation Technology Analysis andStrategic Management 11 301ndash316
Pittaway L Robertson M Munir K Denyer D andNeely A (2004) Networking and Innovation in theUK a Systematic Review of the Literature LondonAdvanced Institute of Management Research
Porter ME and Ketels CHM (2003) UK Compet-itiveness Moving to the Next Stage DTI Econom-ics Paper No 3 URN 03899
Pugh DS Hickson DJ Hinings CR and TurnerC (1969) The context of organization structuresAdministrative Science Quarterly 14 91ndash114
Ramanujam V and Mensch GO (1985) Improvingthe strategyndashinnovation link Journal of ProductInnovation Management 2 213ndash223
Richard O McMillan A Chadwick K and DwyerS (2003) Employing an innovation strategy inracially diverse workforces ndash effects on firm per-formance Group amp Organization Management 28107ndash126
Rickards T (1991) Innovation and creativity treesand pathways RampD Management 21 97ndash108
Rochford L (1991) Generating and screening newproduct ideas Industrial Marketing Management20 287ndash296
Rothwell R (1992) Successful industrial innovationcritical factors for the 1990s RampD Management22 221ndash239
Rothwell R Freeman C Horseley A JervisVTP Robertson AB and Townsend J (1974)SAPPHO updated ndash Project SAPPHO phase IIResearch Policy 3 258ndash291
Saleh SD and Wang CK (1993) The managementof innovation ndash strategy structure and organiza-tional climate IEEE Transactions on EngineeringManagement 40 14ndash21
Schmidt RL and Freeland JR (1992) Recentprogress in modelling RampD project-selection proc-esses IEEE Transactions on Engineering Manage-ment 39 189ndash201
Schroeder RG Van de Ven AH Scudder GDand Polley D (1989) The development of innova-tion ideas In Van de Ven AH Angle HL andPoole M (eds) Research on the Management ofInnovation The Minnesota Studies New YorkHarper amp Row pp 107ndash133
Scott S and Bruce R (1994) Determinants ofinnovative behaviour a path model of individualinnovation Academy of Management Journal 37580ndash607
Shane S Venkataraman S and MacMillan I (1995)Cultural differences in innovation championingstrategies Journal of Management 21 931ndash952
Shepard HA (1967) Innovation-resisting and inno-vation producing organizations Journal of Busi-ness 40 470ndash477
Shin J and McClomb GE (1998) Top executiveleadership and organizational innovation an
46 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
empirical investigation of nonprofit human serviceorganizations (HSOS) Administration in SocialWork 22 1ndash21
Single AW and Spurgeon WM (1996) Creatingand commercializing innovation inside a skunkworks Research-Technology Management 39 38ndash41
Song XM and Parry ME (1996) What separatesJapanese new product winners from losersJournal of Product Innovation Management 13422ndash439
Souitaris V (2002) Firm-specific competenciesdetermining technological innovation a survey inGreece RampD Management 32 61ndash77
Stock GN Greis NP and Fischer WA (2001)Absorptive capacity and new product developmentJournal of High Technology ManagementResearch 12 77ndash91
Sundbo J (1997) Management of innovation inservices Service Industries Journal 17 432ndash455
Sveiby KE (1997) The New Organizational WealthManaging and Measuring Knowledge-BasedAssets San Francisco CA Berrett-Koehler
Szakonyi R (1994) Measuring RampD effectiveness IResearch-Technology Management 37 27ndash32
Thompson L (2003) Improving the creativity oforganizational work groups Academy of Manage-ment Executive 17 96ndash109
Tidd J Bessant J and Pavitt K (1997) ManagingInnovation Integrating Technological Market andOrganizational Change Chichester UK JohnWiley
Tipping J and Zeffren E (1995) Assessing thevalue of your technology ResearchndashTechnologyManagement 38 22ndash40
Trajtenberg M (1990) A penny for your quotes ndashpatent citations and the value of innovations RandJournal of Economics 21 172ndash187
Tranfield D Denyer D and Smart P (2003)Towards a methodology for developing evidence-informed management knowledge by means of asystematic review British Journal of Management14 207ndash222
Tsai W (2001) Knowledge transfer in intraorganiza-tional networks effects of network position andabsorptive capacity on business unit innovation andperformance Academy of Management Journal44 996ndash1004
Van Den Bulte C (2000) New product diffusionacceleration measurement and analysis MarketingScience 19 366ndash380
Verhaeghe A and Kfir R (2002) Managing innovationin a knowledge intensive technology organisation(KITO) RampD Management 32 409ndash417
Verworn B (2002) The fuzzy front end of productdevelopment an exploratory study In Proceedings9th International Product Development ManagementConference Sophia Antipolis France pp 863ndash878Brussels European Institute for Advanced Studiesin Management
Veryzer RW (1998) Discontinuous innovation andthe new product development process Journal ofProduct Innovation Management 15 304ndash321
Volberda HW (1996) Towards the flexible formhow to remain vital in hypercompetitive environ-ments Organizational Science 7 359ndash374
Von Hippel E (1986) Lead users a source of novelproduct concepts Management Science 32 791ndash805
Von Zedtwitz M (2002) Organizational learningthrough post-project reviews in RampD RampD Man-agement 32 255ndash268
Voss C Chase R and Roth A (1999) Internationalservice study Decision Line May 4ndash7
Vyakarnam S and Adams RJ (2001) Institutionalbarriers to enterprise support an empirical studyEnvironment and Planning C Government andPolicy 19 335ndash353
Werner BM and Souder WE (1997) MeasuringRampD performance ndash state of the art Research-Technology Management 40 34ndash42
West MA (1990) The social psychology of innova-tion in groups In West MA and Farr JL (eds)Innovation and Creativity at Work Psychologicaland Organizational Strategies Chichester UKJohn Wiley pp 309ndash333
West MA and Anderson NR (1996) Innovation intop management teams Journal of Applied Psychol-ogy 81 680ndash693
White A (2002) Enabling factors in the front end ofthe innovation process In Proceedings 9thInternational Product Development ManagementConference Sophia Antipolis France BrusselsEuropean Institute for Advanced Studies inManagement pp 879ndash887
Wolfe RA (1994) Organizational innovationreview critique and suggested research direc-tions Journal of Management Studies 31 405ndash431
Yoon E and Lilien GL (1985) A new productlaunch-time decision model Journal of ProductInnovation Management 3 134ndash144
Zahra SA and George G (2002) Absorptivecapacity a review reconceptualization and
copy Blackwell Publishing Ltd 2006 47
March 2006
extension Academy of Management Review 27185
Zaltman G Duncan R and Holbek J (1973) Inno-vations and Organizations New York John Wiley
Zien KA and Buckler SA (1997) From experiencedreams to market crafting a culture of innovationJournal of Product Innovation Management 14274ndash287
Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
copy Blackwell Publishing Ltd 2006 41
March 2006
and failure scenarios Journal of Product Innova-tion Management 18 324ndash342
Balachandra R and Brockhoff K (1995) Are RampDproject termination factors universal Research-Technology Management 38 31ndash36
Balachandra R and Friar J (1997) Factors for suc-cess in RampD projects and new product innovationa contextual framework IEEE Transactions onEngineering Management 44 276ndash287
Baldridge JV and Burnham RA (1975) Organiza-tional innovation ndash individual organizational andenvironmental impacts Administrative ScienceQuarterly 20 165ndash176
Bantel KA and Jackson SE (1989) Top manage-ment and innovations in banking does the compo-sition of the top team make a difference StrategicManagement Journal 10 107ndash124
Barclay I (1992) The new product developmentprocess part 2 Improving the process of new prod-uct development RampD Management 4 307ndash317
Bard JF Balachandra R and Kaufmann PE(1988) An interactive approach to RampD projectselection and termination IEEE Transactions onEngineering Management 35 139ndash146
Barney J (1991) Firm resources and sustained com-petitive advantage Journal of Management 1799ndash120
Becker SW and Whisler TL (1973) The innova-tive organization a selective view of current theoryand research In Wills G Hayhurst R and Midg-ley D (eds) Creating and Marketing New Prod-ucts London Crosby Lockwood Staples
Bess G (1998) A first stage organization life cyclestudy of six emerging nonprofit organizations inLos Angeles Administration in Social Work 2235ndash52
Bessant J (2003) High Involvement InnovationBuilding and Sustaining Competitive AdvantageThrough Continuous Change Chichester JohnWiley
Bessant J and Francis D (1997) Implementing thenew product development process Technovation17 189ndash197
Blackler F (1995) Knowledge knowledge work andorganizations an overview and interpretationOrganization Studies 16 1021ndash1046
Bougrain F and Haudeville B (2002) Innovationcollaboration and SMEs internal research capaci-ties Research Policy 31 735ndash747
Brenner MS (1994) Practical RampD project prioriti-zation Research Technology Management 37 38ndash43
Brown MG and Svenson RA (1988) MeasuringRampD productivity Research-Technology Manage-ment JulyndashAugust 11ndash15
Brown SL and Eisenhardt KM (1997) The art ofcontinuous change linking complexity theory andtime-paced evolution in relentlessly shifting organiza-tions Administrative Science Quarterly 42 1ndash34
Burgelman RA Christensen CM and Wheel-wright SC (2004) Strategic Management of Tech-nology and Innovation 4th edition New YorkMcGraw HillIrwin
Burns TR and Stalker GM (1961) The Manage-ment of Innovation London Tavistock
Calantone RJ and di Benedetto CA (1988) Anintegrative model of the new product developmentprocess an empirical validation Journal of Prod-uct Innovation Management 5 201ndash215
Cebon P and Newton P (1999) Innovation in firmstowards a framework for indicator developmentMelbourne Business School Working Paper 99-9
Chakravorti B (2004) The new rules for bringinginnovations to market Harvard Business Review82 58ndash67
Chen C-J (2004) The effects of knowledgeattribute alliance characteristics and absorptivecapacity on knowledge transfer performance RampDManagement 34 311ndash321
Chesborough HW and Teece DJ (1996) When isvirtual virtuous Organizing for innovation Har-vard Business Review JanuaryndashFebruary 65ndash73
Chiesa V and Masella C (1994) Searching for aneffective measure of RampD performance In Pro-ceedings 2nd International Product DevelopmentManagement Conference Gothenburg Sweden30ndash31 May Brussels European Institute forAdvanced Studies in Management
Chiesa V Coughlan P and Voss A (1996) Devel-opment of a technical innovation audit Journal ofProduct Innovation Management 13 105ndash136
Cohen WM and Levinthal DA (1990) Absorptivecapacity a new perspective on learning and inno-vation Administrative Science Quarterly 35 128ndash152
Cooper RG (1979a) The dimensions of industrialnew product success and failure Journal of Mar-keting 43 93ndash103
Cooper RG (1979b) Identifying industrial newproduct success Project NewProd Industrial Mar-keting Management 8 124ndash135
Cooper RG (1984) The strategyndashperformance linkin product innovation RampD Management 14 247ndash259
42 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Cooper RG (1990) Stage-gate systems a new toolfor managing new products Business Horizons 3344ndash56
Cooper RG and Kleinschmidt EJ (1990) Newproduct success factors a comparison of lsquokillsrsquoversus successes and failures RampD Management20 47ndash64
Cooper RG and Kleinschmidt EJ (1995) Bench-marking the firmrsquos critical success factors in newproduct development Journal of Product Innova-tion Management 12 374ndash391
Cooper RG Edgett SJ and Kleinschmidt EJ(1999) New product portfolio management prac-tices and performance Journal of Product Innova-tion Management 16 333ndash351
Cooper RG Edgett SJ and Kleinschmidt EJ(2001) Portfolio Management for New Products2nd edition Cambridge MA Perseus
Cooper RG Edgett SJ and Kleinschmidt EJ (2004)Benchmarking best NPD practices Research-Technology Management 47 50ndash59
Cordero R (1990) The measurement of innovationperformance in the firm an overview ResearchPolicy 19 185ndash192
Cormican K and OrsquoSullivan D (2004) Auditingbest practice for effective product innovationmanagement Technovation 24 819ndash829
Coughlan P Chiesa V and Voss C (1994) Evalu-ating leadership as an enabler of innovation InProceedings 2nd International Product Develop-ment Management Conference GothenburgSweden 30ndash31 May Brussels European Institutefor Advanced Studies in Management
Covin JG and Slevin DP (1989) Strategic manage-ment of small firms in hostile and benign environ-ments Strategic Management Journal 10 75ndash87
Daft R (1978) A dual-core model of organizationalinnovation Academy of Management Journal 21193ndash210
Damanpour F (1991) Organizational innovation ameta-analysis of effects of determinants and mod-erators Academy of Management Journal 34 555ndash590
Damanpour F (1996) Organizational complexity andinnovation developing and testing multiple contin-gency models Management Science 42 693ndash716
Davis MC (1998) Knowledge management Infor-mation Strategy The Executiversquos Journal 15 11ndash22
De Brentani U (1991) Success factors in developingnew business services European Journal of Mar-keting 25 33ndash60
De Leede J Nijhof AH and Fisscher OA (1999)The myth of self managing teams a reflection onthe allocation of responsibilities between individu-als teams and the organisation Journal of BusinessEthics 21 203ndash215
Deeds DL (2001) The role of RampD intensitytechnical development and absorptive capacity increating entrepreneurial wealth in high technologystart-ups Journal of Engineering and TechnologyManagement 18 29ndash47
Denyer D and Neely A (2004) Introduction to spe-cial issue innovation and productivity performancein the UK International Journal of ManagementReviews 45 131ndash135
Di Benedetto CA (1996) Identifying the key suc-cess factors in new product launch Journal ofProduct Innovation Management 16 530ndash544
Dodgson M and Hinze S (2000) Indicators used tomeasure the innovation process defects and possi-ble remedies Research Evaluation 8 101ndash114
Dougherty D and Cohen M (1995) Product inno-vation in mature firms In Bowman E and KogutB (eds) Redesigning the Firm New York OxfordUniversity Press
Dougherty D and Hardy C (1996) Sustained prod-uct innovation in large mature organizations over-coming innovation-to-organization problemsAcademy of Management Journal 39 1120ndash1153
DTI (1998) An Audience With Innovation Innovationin Management London Department of Trade andIndustry
Dyer B and Song XM (1998) Innovation strategyand sanctioned conflict a new edge in innovationJournal of Product Innovation Management 15505ndash519
Ekvall G (1996) Organizational climate for creativ-ity and innovation European Journal of Work andOrganizational Psychology 5 105ndash123
Ernst H (2002) Success factors of new productdevelopment a review of the empirical literatureInternational Journal of Management Reviews 41ndash40
Farrukh C Phaal R Probert D Gregory M andWright J (2000) Developing a process for therelative valuation of RampD programmes RampDManagement 30 43ndash53
Frenkel A Maital S and Grupp H (2000) Meas-uring dynamic technical change a technometricapproach International Journal of TechnologyManagement 20 429ndash441
Galunic DC and Rodan S (1998) Resource recom-binations and the firm knowledge structures and
copy Blackwell Publishing Ltd 2006 43
March 2006
the potential for Schumpeterian innovationStrategic Management Journal 19 1193ndash1201
Geisler E (1995) An integrated costndashperformancemodel of research-and-development evaluationOmega ndash International Journal of ManagementScience 23 281ndash294
Glaser BG and Strauss AL (1967) The Discoveryof Grounded Theory Strategies for QualitativeResearch London Aldine
Globe S Levy GW and Schwartz CM (1973)Key factors and events in the innovation processResearch Management 16 8ndash15
Goffin K and Pfeiffer R (1999) Innovation Man-agement in UK and German Manufacturing Com-panies London Anglo-German Foundation for theStudy of Industrial Society
Grant RM (1991) The resource-based theory ofcompetitive advantage implications for strategyformulation California Management Review 33114ndash135
Greve HR (2003) A behavioral theory of RampDexpenditures and innovations evidence fromshipbuilding Academy of Management Journal 46685ndash702
Griffin A (1997) PDMA research on new productdevelopment practices updating trends and bench-marking best practices Journal of Product Innova-tion Management 14 429ndash458
Griffin A and Page AL (1993) An interim reporton measuring product development success andfailure Journal of Product Innovation Manage-ment 10 291ndash308
Griliches Z (1990) Patent statistics as economicindicators a survey Journal of Economic Litera-ture 28 1661ndash1707
Hall DL and Nauda A (1990) An interactiveapproach for selecting IRampD projects IEEE Trans-actions on Engineering Management 37 126ndash133
Hauser JR and Zettelmeyer F (1997) Metrics toevaluate RDampE Research-Technology Manage-ment 40 32ndash38
Henriksen AD and Traynor AJ (1999) A practicalRampD project-selection scoring tool IEEE Trans-actions on Engineering Management 46 158ndash170
Hipp C and Grupp H (2005) Innovation in theservice sector the demand for service specific-innovation measurement concepts and typologiesResearch Policy 34 517ndash535
Holbek J (1988) The innovation design dilemmasome notes on its relevance and solutions InGroslashnhaug K and Kaufmann G (eds) Innovation
A Cross-Disciplinary Perspective NorwegianUniversity Press pp 253ndash277
Hope Hailey V (2001) Breaking the mould Innova-tion as a strategy for corporate renewal Inter-national Journal of Human Resource Management12 1126ndash1140
Hull R Coombs R and Peltu M (2000) Know-ledge management practices for innovation anaudit tool for improvement International Journalof Technology Management 20 633ndash656
Hultink EJ Hart S Robben HSJ and Griffin A(2000) Launch decisions and new product successan empirical comparison of consumer and indus-trial products Journal of Product Innovation Man-agement 17 5ndash23
Jassawalla AR and Sashittal HC (1999) Buildingcollaborative cross-functional new product teamsAcademy of Management Executive 13 50ndash63
Jenkins S Forbes S Durrani TS and BanerjeeSK (1997) Managing the product developmentprocess 1 An assessment International Journal ofTechnology Management 13 359ndash378
Kaplan RS and Norton DP (1992) The balancedscorecard ndash measures that drive performance HarvardBusiness Review JanuaryndashFebruary 71ndash79
Keller RT (1986) Predictors of performance ofproject groups in RampD organizations Academy ofManagement Journal 29 715ndash726
Kelm KM Narayanan VK and Pinches GE (1995)Shareholder value creation during research-and-development innovation and commercialization stagesAcademy of Management Journal 38 770ndash786
Kerssens-van Drongelen IC and Bilderbeek J(1999) RampD performance measurement morethan choosing a set of metrics RampD Management29 35ndash46
Kerssens-van Drongelen IC and de Weerd-Nederhof PC (1999) The use of performancemeasurement tools for balancing short- and long-term NPD performance International Journal ofInnovation Management 3 397ndash426
Kessler EH and Chakrabarti AK (1996) Innova-tion speed a conceptual model of context anteced-ents and outcomes Academy of ManagementReview 21 1143ndash1191
Kim B and Oh H (2002) An effective RampD per-formance measurement system survey of KoreanRampD researchers Omega ndash International Journalof Management Science 30 19ndash31
Kim J and Wilemon D (2002) Strategic issues inmanaging innovationrsquos fuzzy front-end EuropeanJournal of Innovation Management 5 27ndash39
44 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Kimberly JR (1981) Managerial innovation InNystrom PC and Starbuck WH (eds) Handbookof Organizational Design Vol 1 New YorkOxford University Press pp 84ndash104
King N (1992) Modelling the innovation process anempirical comparison of approaches Journal ofOccupational and Organizational Psychology 6589ndash100
Kirton MJ (1976) Adaptors and innovators adescription and measure Journal of Applied Psy-chology 61 622ndash629
Kivimaumlki M Kuk G Elovainio M Thomson LKalliomaumlki-Levanto T and Heikkilauml A (1997)The team climate inventory (TCI) ndash four or fivefactors Testing the structure of TCI in samples oflow and high complexity jobs Journal of Occupa-tional and Organizational Psychology 70 375ndash389
Kivimaumlki M Lansisalmi H Elovainio M Heik-kila A Lindstrom K Harisalo R Sipila K andPuolimatka L (2000) Communication as a deter-minant of organizational innovation RampD Man-agement 30 33ndash42
Kleinknecht A (1987) Measuring RampD in smallfirms how much are we missing Journal of Indus-trial Economics 36 253ndash256
Koen P Ajamian G Burkart R Clamen ADavidson J DrsquoAmore R Elkins C Herald KIncorvia M Johnson A Karol R Seibert RSlavejkov A and Wagner K (2001) Providingclarity and a common language to the lsquofuzzy front endrsquoResearch-Technology Management 44 46ndash55
Koput K (1997) A chaotic model of innovativesearch some answers many questions Organiza-tion Science 8 528ndash542
Lawrence PR and Lorsch JW (1967) Organizationand Environment Harvard MA Harvard Univer-sity Press
Lee M Son B and Lee H (1996) Measuring RampDeffectiveness in Korean companies Research-Technology Management 39 28ndash31
Leonard D and Sensiper S (1998) The role of tacitknowledge in group innovation California Man-agement Review 40 112ndash132
Leseure M Birdi K Bauer J Denyer D andNeely A (2004) Adoption of Promising PracticeA Systematic Review of the Literature LondonAdvanced Institute of Management Research
Li HY and Atuahene-Gima K (2001) Productinnovation strategy and the performance of newtechnology ventures in China Academy of Man-agement Journal 44 1123ndash1134
Liao J Welsch H and Stoica M (2003) Organiza-tional absorptive capacity and responsivenessan empirical investigation of growth-orientedSMEs Entrepreneurship Theory and Practice 2863ndash86
Linstone HA and Turoff M (eds) (2002) The Del-phi Method Techniques and Applications httpwwwisnjitedupubsdelphibook
Loch C Stein L and Terwiesch C (1996) Meas-uring development performance in the electronicsindustry Journal of Product Innovation Manage-ment 13 3ndash20
Mathisen GE and Einarsen S (2004) A review ofinstruments assessing creative and innovative envi-ronments within organizations Creativity ResearchJournal 16 119ndash140
Maylor H (2001) Assessing the relationshipbetween practice changes and process improve-ment in new product development Omega ndashInternational Journal of Management Science 2985ndash96
McAdam RMS (1999) The process of knowledgemanagement within organizations a critical assess-ment of both theory and practice Knowledge andProcess Management 6 101ndash113
McManus RJ Wilson S Delaney BC Fitzmau-rice DA Hyde CJ Tobias RS Jowett S andHobbs FDR (1998) Review of the usefulness ofcontacting other experts when conducting a litera-ture search for systematic reviews British MedicalJournal 317 1562ndash1563
Miles RE and Snow CC (1978) Organization StrategyStructure and Process New York McGraw-Hill
Miller D and Friesen PH (1982) Innovation inconservative and entrepreneurial firms two modelsof strategic momentum Strategic ManagementJournal 3 1ndash24
Mintzberg H (1978) Patterns in strategy formationManagement Science 24 934ndash948
Mitroff I (1987) Business Not As Usual Rethinkingour Individual Corporate and Industrial Strategiesfor Global Competition London Jossey-Bass
Moenaert RK De Meyer A Souder WE andDeschoolmeester D (1995) RampDMarketing com-munication during the fuzzy front-end IEEETransactions on Engineering Management 42243ndash257
Neely A and Hii J (1998) Innovation and BusinessPerformance A Literature Review Report producedfor Government Office for the Eastern RegionCambridge The Judge Institute of ManagementStudies University of Cambridge
copy Blackwell Publishing Ltd 2006 45
March 2006
Nelson R and Winter G (1982) An EvolutionaryTheory of Economic Change Cambridge MABelknap Press
Nohria N and Gulati R (1996) Is slack good or badfor innovation Academy of Management Journal39 1245ndash1264
Nonaka I (1991) The knowledge-creating companyHarvard Business Review NovemberndashDecember96ndash104
Nonaka I and Takeuchi H (1995) The KnowledgeCreating Company How Japanese CompaniesCreate the Dynamics of Innovation New YorkOxford University Press
OrsquoBrien JP (2003) The capital structure implica-tions of pursuing a strategy of innovation StrategicManagement Journal 24 415ndash431
OrsquoReilly CA and Tushman ML (1997) Using cul-ture for strategic advantage promoting innovationthrough social control In Tushman ML andAnderson P (eds) Managing Strategic Innovationand Change A Collection of Readings New YorkOxford University Press pp 200ndash216
Oliver N Dewberry E and Dostaler I (1999) Newproduct development performance and practice aninternational benchmarking study in the consumerelectronics industry In Proceedings 6th Inter-national Product Development Management Confer-ence Cambridge UK Brussels European Institutefor Advanced Studies in Management
Pakes A and Griliches Z (1980) Patents and RampDat the firm level a first report Economic Letters 5377ndash381
Parthasarthy R and Hammond J (2002) Productinnovation input and outcome moderating effectsof the innovation process Journal of Engineeringand Technology Management 19 75ndash91
Patterson F (2003) Innovation potential indicatorAvailable at wwwoppcouk
Phelps B (2004) Smart Business Metrics MeasureWhat Really Counts and Manage What Makes theDifference London FT-Prentice Hall
Pinto JK and Prescott JE (1988) Changes in crit-ical success factors over the stages in the projectlife cycle Journal of Management 14 5ndash18
Pitt M and Clarke K (1999) Competing on compe-tence a knowledge perspective on the managementof strategic innovation Technology Analysis andStrategic Management 11 301ndash316
Pittaway L Robertson M Munir K Denyer D andNeely A (2004) Networking and Innovation in theUK a Systematic Review of the Literature LondonAdvanced Institute of Management Research
Porter ME and Ketels CHM (2003) UK Compet-itiveness Moving to the Next Stage DTI Econom-ics Paper No 3 URN 03899
Pugh DS Hickson DJ Hinings CR and TurnerC (1969) The context of organization structuresAdministrative Science Quarterly 14 91ndash114
Ramanujam V and Mensch GO (1985) Improvingthe strategyndashinnovation link Journal of ProductInnovation Management 2 213ndash223
Richard O McMillan A Chadwick K and DwyerS (2003) Employing an innovation strategy inracially diverse workforces ndash effects on firm per-formance Group amp Organization Management 28107ndash126
Rickards T (1991) Innovation and creativity treesand pathways RampD Management 21 97ndash108
Rochford L (1991) Generating and screening newproduct ideas Industrial Marketing Management20 287ndash296
Rothwell R (1992) Successful industrial innovationcritical factors for the 1990s RampD Management22 221ndash239
Rothwell R Freeman C Horseley A JervisVTP Robertson AB and Townsend J (1974)SAPPHO updated ndash Project SAPPHO phase IIResearch Policy 3 258ndash291
Saleh SD and Wang CK (1993) The managementof innovation ndash strategy structure and organiza-tional climate IEEE Transactions on EngineeringManagement 40 14ndash21
Schmidt RL and Freeland JR (1992) Recentprogress in modelling RampD project-selection proc-esses IEEE Transactions on Engineering Manage-ment 39 189ndash201
Schroeder RG Van de Ven AH Scudder GDand Polley D (1989) The development of innova-tion ideas In Van de Ven AH Angle HL andPoole M (eds) Research on the Management ofInnovation The Minnesota Studies New YorkHarper amp Row pp 107ndash133
Scott S and Bruce R (1994) Determinants ofinnovative behaviour a path model of individualinnovation Academy of Management Journal 37580ndash607
Shane S Venkataraman S and MacMillan I (1995)Cultural differences in innovation championingstrategies Journal of Management 21 931ndash952
Shepard HA (1967) Innovation-resisting and inno-vation producing organizations Journal of Busi-ness 40 470ndash477
Shin J and McClomb GE (1998) Top executiveleadership and organizational innovation an
46 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
empirical investigation of nonprofit human serviceorganizations (HSOS) Administration in SocialWork 22 1ndash21
Single AW and Spurgeon WM (1996) Creatingand commercializing innovation inside a skunkworks Research-Technology Management 39 38ndash41
Song XM and Parry ME (1996) What separatesJapanese new product winners from losersJournal of Product Innovation Management 13422ndash439
Souitaris V (2002) Firm-specific competenciesdetermining technological innovation a survey inGreece RampD Management 32 61ndash77
Stock GN Greis NP and Fischer WA (2001)Absorptive capacity and new product developmentJournal of High Technology ManagementResearch 12 77ndash91
Sundbo J (1997) Management of innovation inservices Service Industries Journal 17 432ndash455
Sveiby KE (1997) The New Organizational WealthManaging and Measuring Knowledge-BasedAssets San Francisco CA Berrett-Koehler
Szakonyi R (1994) Measuring RampD effectiveness IResearch-Technology Management 37 27ndash32
Thompson L (2003) Improving the creativity oforganizational work groups Academy of Manage-ment Executive 17 96ndash109
Tidd J Bessant J and Pavitt K (1997) ManagingInnovation Integrating Technological Market andOrganizational Change Chichester UK JohnWiley
Tipping J and Zeffren E (1995) Assessing thevalue of your technology ResearchndashTechnologyManagement 38 22ndash40
Trajtenberg M (1990) A penny for your quotes ndashpatent citations and the value of innovations RandJournal of Economics 21 172ndash187
Tranfield D Denyer D and Smart P (2003)Towards a methodology for developing evidence-informed management knowledge by means of asystematic review British Journal of Management14 207ndash222
Tsai W (2001) Knowledge transfer in intraorganiza-tional networks effects of network position andabsorptive capacity on business unit innovation andperformance Academy of Management Journal44 996ndash1004
Van Den Bulte C (2000) New product diffusionacceleration measurement and analysis MarketingScience 19 366ndash380
Verhaeghe A and Kfir R (2002) Managing innovationin a knowledge intensive technology organisation(KITO) RampD Management 32 409ndash417
Verworn B (2002) The fuzzy front end of productdevelopment an exploratory study In Proceedings9th International Product Development ManagementConference Sophia Antipolis France pp 863ndash878Brussels European Institute for Advanced Studiesin Management
Veryzer RW (1998) Discontinuous innovation andthe new product development process Journal ofProduct Innovation Management 15 304ndash321
Volberda HW (1996) Towards the flexible formhow to remain vital in hypercompetitive environ-ments Organizational Science 7 359ndash374
Von Hippel E (1986) Lead users a source of novelproduct concepts Management Science 32 791ndash805
Von Zedtwitz M (2002) Organizational learningthrough post-project reviews in RampD RampD Man-agement 32 255ndash268
Voss C Chase R and Roth A (1999) Internationalservice study Decision Line May 4ndash7
Vyakarnam S and Adams RJ (2001) Institutionalbarriers to enterprise support an empirical studyEnvironment and Planning C Government andPolicy 19 335ndash353
Werner BM and Souder WE (1997) MeasuringRampD performance ndash state of the art Research-Technology Management 40 34ndash42
West MA (1990) The social psychology of innova-tion in groups In West MA and Farr JL (eds)Innovation and Creativity at Work Psychologicaland Organizational Strategies Chichester UKJohn Wiley pp 309ndash333
West MA and Anderson NR (1996) Innovation intop management teams Journal of Applied Psychol-ogy 81 680ndash693
White A (2002) Enabling factors in the front end ofthe innovation process In Proceedings 9thInternational Product Development ManagementConference Sophia Antipolis France BrusselsEuropean Institute for Advanced Studies inManagement pp 879ndash887
Wolfe RA (1994) Organizational innovationreview critique and suggested research direc-tions Journal of Management Studies 31 405ndash431
Yoon E and Lilien GL (1985) A new productlaunch-time decision model Journal of ProductInnovation Management 3 134ndash144
Zahra SA and George G (2002) Absorptivecapacity a review reconceptualization and
copy Blackwell Publishing Ltd 2006 47
March 2006
extension Academy of Management Review 27185
Zaltman G Duncan R and Holbek J (1973) Inno-vations and Organizations New York John Wiley
Zien KA and Buckler SA (1997) From experiencedreams to market crafting a culture of innovationJournal of Product Innovation Management 14274ndash287
Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
42 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Cooper RG (1990) Stage-gate systems a new toolfor managing new products Business Horizons 3344ndash56
Cooper RG and Kleinschmidt EJ (1990) Newproduct success factors a comparison of lsquokillsrsquoversus successes and failures RampD Management20 47ndash64
Cooper RG and Kleinschmidt EJ (1995) Bench-marking the firmrsquos critical success factors in newproduct development Journal of Product Innova-tion Management 12 374ndash391
Cooper RG Edgett SJ and Kleinschmidt EJ(1999) New product portfolio management prac-tices and performance Journal of Product Innova-tion Management 16 333ndash351
Cooper RG Edgett SJ and Kleinschmidt EJ(2001) Portfolio Management for New Products2nd edition Cambridge MA Perseus
Cooper RG Edgett SJ and Kleinschmidt EJ (2004)Benchmarking best NPD practices Research-Technology Management 47 50ndash59
Cordero R (1990) The measurement of innovationperformance in the firm an overview ResearchPolicy 19 185ndash192
Cormican K and OrsquoSullivan D (2004) Auditingbest practice for effective product innovationmanagement Technovation 24 819ndash829
Coughlan P Chiesa V and Voss C (1994) Evalu-ating leadership as an enabler of innovation InProceedings 2nd International Product Develop-ment Management Conference GothenburgSweden 30ndash31 May Brussels European Institutefor Advanced Studies in Management
Covin JG and Slevin DP (1989) Strategic manage-ment of small firms in hostile and benign environ-ments Strategic Management Journal 10 75ndash87
Daft R (1978) A dual-core model of organizationalinnovation Academy of Management Journal 21193ndash210
Damanpour F (1991) Organizational innovation ameta-analysis of effects of determinants and mod-erators Academy of Management Journal 34 555ndash590
Damanpour F (1996) Organizational complexity andinnovation developing and testing multiple contin-gency models Management Science 42 693ndash716
Davis MC (1998) Knowledge management Infor-mation Strategy The Executiversquos Journal 15 11ndash22
De Brentani U (1991) Success factors in developingnew business services European Journal of Mar-keting 25 33ndash60
De Leede J Nijhof AH and Fisscher OA (1999)The myth of self managing teams a reflection onthe allocation of responsibilities between individu-als teams and the organisation Journal of BusinessEthics 21 203ndash215
Deeds DL (2001) The role of RampD intensitytechnical development and absorptive capacity increating entrepreneurial wealth in high technologystart-ups Journal of Engineering and TechnologyManagement 18 29ndash47
Denyer D and Neely A (2004) Introduction to spe-cial issue innovation and productivity performancein the UK International Journal of ManagementReviews 45 131ndash135
Di Benedetto CA (1996) Identifying the key suc-cess factors in new product launch Journal ofProduct Innovation Management 16 530ndash544
Dodgson M and Hinze S (2000) Indicators used tomeasure the innovation process defects and possi-ble remedies Research Evaluation 8 101ndash114
Dougherty D and Cohen M (1995) Product inno-vation in mature firms In Bowman E and KogutB (eds) Redesigning the Firm New York OxfordUniversity Press
Dougherty D and Hardy C (1996) Sustained prod-uct innovation in large mature organizations over-coming innovation-to-organization problemsAcademy of Management Journal 39 1120ndash1153
DTI (1998) An Audience With Innovation Innovationin Management London Department of Trade andIndustry
Dyer B and Song XM (1998) Innovation strategyand sanctioned conflict a new edge in innovationJournal of Product Innovation Management 15505ndash519
Ekvall G (1996) Organizational climate for creativ-ity and innovation European Journal of Work andOrganizational Psychology 5 105ndash123
Ernst H (2002) Success factors of new productdevelopment a review of the empirical literatureInternational Journal of Management Reviews 41ndash40
Farrukh C Phaal R Probert D Gregory M andWright J (2000) Developing a process for therelative valuation of RampD programmes RampDManagement 30 43ndash53
Frenkel A Maital S and Grupp H (2000) Meas-uring dynamic technical change a technometricapproach International Journal of TechnologyManagement 20 429ndash441
Galunic DC and Rodan S (1998) Resource recom-binations and the firm knowledge structures and
copy Blackwell Publishing Ltd 2006 43
March 2006
the potential for Schumpeterian innovationStrategic Management Journal 19 1193ndash1201
Geisler E (1995) An integrated costndashperformancemodel of research-and-development evaluationOmega ndash International Journal of ManagementScience 23 281ndash294
Glaser BG and Strauss AL (1967) The Discoveryof Grounded Theory Strategies for QualitativeResearch London Aldine
Globe S Levy GW and Schwartz CM (1973)Key factors and events in the innovation processResearch Management 16 8ndash15
Goffin K and Pfeiffer R (1999) Innovation Man-agement in UK and German Manufacturing Com-panies London Anglo-German Foundation for theStudy of Industrial Society
Grant RM (1991) The resource-based theory ofcompetitive advantage implications for strategyformulation California Management Review 33114ndash135
Greve HR (2003) A behavioral theory of RampDexpenditures and innovations evidence fromshipbuilding Academy of Management Journal 46685ndash702
Griffin A (1997) PDMA research on new productdevelopment practices updating trends and bench-marking best practices Journal of Product Innova-tion Management 14 429ndash458
Griffin A and Page AL (1993) An interim reporton measuring product development success andfailure Journal of Product Innovation Manage-ment 10 291ndash308
Griliches Z (1990) Patent statistics as economicindicators a survey Journal of Economic Litera-ture 28 1661ndash1707
Hall DL and Nauda A (1990) An interactiveapproach for selecting IRampD projects IEEE Trans-actions on Engineering Management 37 126ndash133
Hauser JR and Zettelmeyer F (1997) Metrics toevaluate RDampE Research-Technology Manage-ment 40 32ndash38
Henriksen AD and Traynor AJ (1999) A practicalRampD project-selection scoring tool IEEE Trans-actions on Engineering Management 46 158ndash170
Hipp C and Grupp H (2005) Innovation in theservice sector the demand for service specific-innovation measurement concepts and typologiesResearch Policy 34 517ndash535
Holbek J (1988) The innovation design dilemmasome notes on its relevance and solutions InGroslashnhaug K and Kaufmann G (eds) Innovation
A Cross-Disciplinary Perspective NorwegianUniversity Press pp 253ndash277
Hope Hailey V (2001) Breaking the mould Innova-tion as a strategy for corporate renewal Inter-national Journal of Human Resource Management12 1126ndash1140
Hull R Coombs R and Peltu M (2000) Know-ledge management practices for innovation anaudit tool for improvement International Journalof Technology Management 20 633ndash656
Hultink EJ Hart S Robben HSJ and Griffin A(2000) Launch decisions and new product successan empirical comparison of consumer and indus-trial products Journal of Product Innovation Man-agement 17 5ndash23
Jassawalla AR and Sashittal HC (1999) Buildingcollaborative cross-functional new product teamsAcademy of Management Executive 13 50ndash63
Jenkins S Forbes S Durrani TS and BanerjeeSK (1997) Managing the product developmentprocess 1 An assessment International Journal ofTechnology Management 13 359ndash378
Kaplan RS and Norton DP (1992) The balancedscorecard ndash measures that drive performance HarvardBusiness Review JanuaryndashFebruary 71ndash79
Keller RT (1986) Predictors of performance ofproject groups in RampD organizations Academy ofManagement Journal 29 715ndash726
Kelm KM Narayanan VK and Pinches GE (1995)Shareholder value creation during research-and-development innovation and commercialization stagesAcademy of Management Journal 38 770ndash786
Kerssens-van Drongelen IC and Bilderbeek J(1999) RampD performance measurement morethan choosing a set of metrics RampD Management29 35ndash46
Kerssens-van Drongelen IC and de Weerd-Nederhof PC (1999) The use of performancemeasurement tools for balancing short- and long-term NPD performance International Journal ofInnovation Management 3 397ndash426
Kessler EH and Chakrabarti AK (1996) Innova-tion speed a conceptual model of context anteced-ents and outcomes Academy of ManagementReview 21 1143ndash1191
Kim B and Oh H (2002) An effective RampD per-formance measurement system survey of KoreanRampD researchers Omega ndash International Journalof Management Science 30 19ndash31
Kim J and Wilemon D (2002) Strategic issues inmanaging innovationrsquos fuzzy front-end EuropeanJournal of Innovation Management 5 27ndash39
44 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Kimberly JR (1981) Managerial innovation InNystrom PC and Starbuck WH (eds) Handbookof Organizational Design Vol 1 New YorkOxford University Press pp 84ndash104
King N (1992) Modelling the innovation process anempirical comparison of approaches Journal ofOccupational and Organizational Psychology 6589ndash100
Kirton MJ (1976) Adaptors and innovators adescription and measure Journal of Applied Psy-chology 61 622ndash629
Kivimaumlki M Kuk G Elovainio M Thomson LKalliomaumlki-Levanto T and Heikkilauml A (1997)The team climate inventory (TCI) ndash four or fivefactors Testing the structure of TCI in samples oflow and high complexity jobs Journal of Occupa-tional and Organizational Psychology 70 375ndash389
Kivimaumlki M Lansisalmi H Elovainio M Heik-kila A Lindstrom K Harisalo R Sipila K andPuolimatka L (2000) Communication as a deter-minant of organizational innovation RampD Man-agement 30 33ndash42
Kleinknecht A (1987) Measuring RampD in smallfirms how much are we missing Journal of Indus-trial Economics 36 253ndash256
Koen P Ajamian G Burkart R Clamen ADavidson J DrsquoAmore R Elkins C Herald KIncorvia M Johnson A Karol R Seibert RSlavejkov A and Wagner K (2001) Providingclarity and a common language to the lsquofuzzy front endrsquoResearch-Technology Management 44 46ndash55
Koput K (1997) A chaotic model of innovativesearch some answers many questions Organiza-tion Science 8 528ndash542
Lawrence PR and Lorsch JW (1967) Organizationand Environment Harvard MA Harvard Univer-sity Press
Lee M Son B and Lee H (1996) Measuring RampDeffectiveness in Korean companies Research-Technology Management 39 28ndash31
Leonard D and Sensiper S (1998) The role of tacitknowledge in group innovation California Man-agement Review 40 112ndash132
Leseure M Birdi K Bauer J Denyer D andNeely A (2004) Adoption of Promising PracticeA Systematic Review of the Literature LondonAdvanced Institute of Management Research
Li HY and Atuahene-Gima K (2001) Productinnovation strategy and the performance of newtechnology ventures in China Academy of Man-agement Journal 44 1123ndash1134
Liao J Welsch H and Stoica M (2003) Organiza-tional absorptive capacity and responsivenessan empirical investigation of growth-orientedSMEs Entrepreneurship Theory and Practice 2863ndash86
Linstone HA and Turoff M (eds) (2002) The Del-phi Method Techniques and Applications httpwwwisnjitedupubsdelphibook
Loch C Stein L and Terwiesch C (1996) Meas-uring development performance in the electronicsindustry Journal of Product Innovation Manage-ment 13 3ndash20
Mathisen GE and Einarsen S (2004) A review ofinstruments assessing creative and innovative envi-ronments within organizations Creativity ResearchJournal 16 119ndash140
Maylor H (2001) Assessing the relationshipbetween practice changes and process improve-ment in new product development Omega ndashInternational Journal of Management Science 2985ndash96
McAdam RMS (1999) The process of knowledgemanagement within organizations a critical assess-ment of both theory and practice Knowledge andProcess Management 6 101ndash113
McManus RJ Wilson S Delaney BC Fitzmau-rice DA Hyde CJ Tobias RS Jowett S andHobbs FDR (1998) Review of the usefulness ofcontacting other experts when conducting a litera-ture search for systematic reviews British MedicalJournal 317 1562ndash1563
Miles RE and Snow CC (1978) Organization StrategyStructure and Process New York McGraw-Hill
Miller D and Friesen PH (1982) Innovation inconservative and entrepreneurial firms two modelsof strategic momentum Strategic ManagementJournal 3 1ndash24
Mintzberg H (1978) Patterns in strategy formationManagement Science 24 934ndash948
Mitroff I (1987) Business Not As Usual Rethinkingour Individual Corporate and Industrial Strategiesfor Global Competition London Jossey-Bass
Moenaert RK De Meyer A Souder WE andDeschoolmeester D (1995) RampDMarketing com-munication during the fuzzy front-end IEEETransactions on Engineering Management 42243ndash257
Neely A and Hii J (1998) Innovation and BusinessPerformance A Literature Review Report producedfor Government Office for the Eastern RegionCambridge The Judge Institute of ManagementStudies University of Cambridge
copy Blackwell Publishing Ltd 2006 45
March 2006
Nelson R and Winter G (1982) An EvolutionaryTheory of Economic Change Cambridge MABelknap Press
Nohria N and Gulati R (1996) Is slack good or badfor innovation Academy of Management Journal39 1245ndash1264
Nonaka I (1991) The knowledge-creating companyHarvard Business Review NovemberndashDecember96ndash104
Nonaka I and Takeuchi H (1995) The KnowledgeCreating Company How Japanese CompaniesCreate the Dynamics of Innovation New YorkOxford University Press
OrsquoBrien JP (2003) The capital structure implica-tions of pursuing a strategy of innovation StrategicManagement Journal 24 415ndash431
OrsquoReilly CA and Tushman ML (1997) Using cul-ture for strategic advantage promoting innovationthrough social control In Tushman ML andAnderson P (eds) Managing Strategic Innovationand Change A Collection of Readings New YorkOxford University Press pp 200ndash216
Oliver N Dewberry E and Dostaler I (1999) Newproduct development performance and practice aninternational benchmarking study in the consumerelectronics industry In Proceedings 6th Inter-national Product Development Management Confer-ence Cambridge UK Brussels European Institutefor Advanced Studies in Management
Pakes A and Griliches Z (1980) Patents and RampDat the firm level a first report Economic Letters 5377ndash381
Parthasarthy R and Hammond J (2002) Productinnovation input and outcome moderating effectsof the innovation process Journal of Engineeringand Technology Management 19 75ndash91
Patterson F (2003) Innovation potential indicatorAvailable at wwwoppcouk
Phelps B (2004) Smart Business Metrics MeasureWhat Really Counts and Manage What Makes theDifference London FT-Prentice Hall
Pinto JK and Prescott JE (1988) Changes in crit-ical success factors over the stages in the projectlife cycle Journal of Management 14 5ndash18
Pitt M and Clarke K (1999) Competing on compe-tence a knowledge perspective on the managementof strategic innovation Technology Analysis andStrategic Management 11 301ndash316
Pittaway L Robertson M Munir K Denyer D andNeely A (2004) Networking and Innovation in theUK a Systematic Review of the Literature LondonAdvanced Institute of Management Research
Porter ME and Ketels CHM (2003) UK Compet-itiveness Moving to the Next Stage DTI Econom-ics Paper No 3 URN 03899
Pugh DS Hickson DJ Hinings CR and TurnerC (1969) The context of organization structuresAdministrative Science Quarterly 14 91ndash114
Ramanujam V and Mensch GO (1985) Improvingthe strategyndashinnovation link Journal of ProductInnovation Management 2 213ndash223
Richard O McMillan A Chadwick K and DwyerS (2003) Employing an innovation strategy inracially diverse workforces ndash effects on firm per-formance Group amp Organization Management 28107ndash126
Rickards T (1991) Innovation and creativity treesand pathways RampD Management 21 97ndash108
Rochford L (1991) Generating and screening newproduct ideas Industrial Marketing Management20 287ndash296
Rothwell R (1992) Successful industrial innovationcritical factors for the 1990s RampD Management22 221ndash239
Rothwell R Freeman C Horseley A JervisVTP Robertson AB and Townsend J (1974)SAPPHO updated ndash Project SAPPHO phase IIResearch Policy 3 258ndash291
Saleh SD and Wang CK (1993) The managementof innovation ndash strategy structure and organiza-tional climate IEEE Transactions on EngineeringManagement 40 14ndash21
Schmidt RL and Freeland JR (1992) Recentprogress in modelling RampD project-selection proc-esses IEEE Transactions on Engineering Manage-ment 39 189ndash201
Schroeder RG Van de Ven AH Scudder GDand Polley D (1989) The development of innova-tion ideas In Van de Ven AH Angle HL andPoole M (eds) Research on the Management ofInnovation The Minnesota Studies New YorkHarper amp Row pp 107ndash133
Scott S and Bruce R (1994) Determinants ofinnovative behaviour a path model of individualinnovation Academy of Management Journal 37580ndash607
Shane S Venkataraman S and MacMillan I (1995)Cultural differences in innovation championingstrategies Journal of Management 21 931ndash952
Shepard HA (1967) Innovation-resisting and inno-vation producing organizations Journal of Busi-ness 40 470ndash477
Shin J and McClomb GE (1998) Top executiveleadership and organizational innovation an
46 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
empirical investigation of nonprofit human serviceorganizations (HSOS) Administration in SocialWork 22 1ndash21
Single AW and Spurgeon WM (1996) Creatingand commercializing innovation inside a skunkworks Research-Technology Management 39 38ndash41
Song XM and Parry ME (1996) What separatesJapanese new product winners from losersJournal of Product Innovation Management 13422ndash439
Souitaris V (2002) Firm-specific competenciesdetermining technological innovation a survey inGreece RampD Management 32 61ndash77
Stock GN Greis NP and Fischer WA (2001)Absorptive capacity and new product developmentJournal of High Technology ManagementResearch 12 77ndash91
Sundbo J (1997) Management of innovation inservices Service Industries Journal 17 432ndash455
Sveiby KE (1997) The New Organizational WealthManaging and Measuring Knowledge-BasedAssets San Francisco CA Berrett-Koehler
Szakonyi R (1994) Measuring RampD effectiveness IResearch-Technology Management 37 27ndash32
Thompson L (2003) Improving the creativity oforganizational work groups Academy of Manage-ment Executive 17 96ndash109
Tidd J Bessant J and Pavitt K (1997) ManagingInnovation Integrating Technological Market andOrganizational Change Chichester UK JohnWiley
Tipping J and Zeffren E (1995) Assessing thevalue of your technology ResearchndashTechnologyManagement 38 22ndash40
Trajtenberg M (1990) A penny for your quotes ndashpatent citations and the value of innovations RandJournal of Economics 21 172ndash187
Tranfield D Denyer D and Smart P (2003)Towards a methodology for developing evidence-informed management knowledge by means of asystematic review British Journal of Management14 207ndash222
Tsai W (2001) Knowledge transfer in intraorganiza-tional networks effects of network position andabsorptive capacity on business unit innovation andperformance Academy of Management Journal44 996ndash1004
Van Den Bulte C (2000) New product diffusionacceleration measurement and analysis MarketingScience 19 366ndash380
Verhaeghe A and Kfir R (2002) Managing innovationin a knowledge intensive technology organisation(KITO) RampD Management 32 409ndash417
Verworn B (2002) The fuzzy front end of productdevelopment an exploratory study In Proceedings9th International Product Development ManagementConference Sophia Antipolis France pp 863ndash878Brussels European Institute for Advanced Studiesin Management
Veryzer RW (1998) Discontinuous innovation andthe new product development process Journal ofProduct Innovation Management 15 304ndash321
Volberda HW (1996) Towards the flexible formhow to remain vital in hypercompetitive environ-ments Organizational Science 7 359ndash374
Von Hippel E (1986) Lead users a source of novelproduct concepts Management Science 32 791ndash805
Von Zedtwitz M (2002) Organizational learningthrough post-project reviews in RampD RampD Man-agement 32 255ndash268
Voss C Chase R and Roth A (1999) Internationalservice study Decision Line May 4ndash7
Vyakarnam S and Adams RJ (2001) Institutionalbarriers to enterprise support an empirical studyEnvironment and Planning C Government andPolicy 19 335ndash353
Werner BM and Souder WE (1997) MeasuringRampD performance ndash state of the art Research-Technology Management 40 34ndash42
West MA (1990) The social psychology of innova-tion in groups In West MA and Farr JL (eds)Innovation and Creativity at Work Psychologicaland Organizational Strategies Chichester UKJohn Wiley pp 309ndash333
West MA and Anderson NR (1996) Innovation intop management teams Journal of Applied Psychol-ogy 81 680ndash693
White A (2002) Enabling factors in the front end ofthe innovation process In Proceedings 9thInternational Product Development ManagementConference Sophia Antipolis France BrusselsEuropean Institute for Advanced Studies inManagement pp 879ndash887
Wolfe RA (1994) Organizational innovationreview critique and suggested research direc-tions Journal of Management Studies 31 405ndash431
Yoon E and Lilien GL (1985) A new productlaunch-time decision model Journal of ProductInnovation Management 3 134ndash144
Zahra SA and George G (2002) Absorptivecapacity a review reconceptualization and
copy Blackwell Publishing Ltd 2006 47
March 2006
extension Academy of Management Review 27185
Zaltman G Duncan R and Holbek J (1973) Inno-vations and Organizations New York John Wiley
Zien KA and Buckler SA (1997) From experiencedreams to market crafting a culture of innovationJournal of Product Innovation Management 14274ndash287
Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
copy Blackwell Publishing Ltd 2006 43
March 2006
the potential for Schumpeterian innovationStrategic Management Journal 19 1193ndash1201
Geisler E (1995) An integrated costndashperformancemodel of research-and-development evaluationOmega ndash International Journal of ManagementScience 23 281ndash294
Glaser BG and Strauss AL (1967) The Discoveryof Grounded Theory Strategies for QualitativeResearch London Aldine
Globe S Levy GW and Schwartz CM (1973)Key factors and events in the innovation processResearch Management 16 8ndash15
Goffin K and Pfeiffer R (1999) Innovation Man-agement in UK and German Manufacturing Com-panies London Anglo-German Foundation for theStudy of Industrial Society
Grant RM (1991) The resource-based theory ofcompetitive advantage implications for strategyformulation California Management Review 33114ndash135
Greve HR (2003) A behavioral theory of RampDexpenditures and innovations evidence fromshipbuilding Academy of Management Journal 46685ndash702
Griffin A (1997) PDMA research on new productdevelopment practices updating trends and bench-marking best practices Journal of Product Innova-tion Management 14 429ndash458
Griffin A and Page AL (1993) An interim reporton measuring product development success andfailure Journal of Product Innovation Manage-ment 10 291ndash308
Griliches Z (1990) Patent statistics as economicindicators a survey Journal of Economic Litera-ture 28 1661ndash1707
Hall DL and Nauda A (1990) An interactiveapproach for selecting IRampD projects IEEE Trans-actions on Engineering Management 37 126ndash133
Hauser JR and Zettelmeyer F (1997) Metrics toevaluate RDampE Research-Technology Manage-ment 40 32ndash38
Henriksen AD and Traynor AJ (1999) A practicalRampD project-selection scoring tool IEEE Trans-actions on Engineering Management 46 158ndash170
Hipp C and Grupp H (2005) Innovation in theservice sector the demand for service specific-innovation measurement concepts and typologiesResearch Policy 34 517ndash535
Holbek J (1988) The innovation design dilemmasome notes on its relevance and solutions InGroslashnhaug K and Kaufmann G (eds) Innovation
A Cross-Disciplinary Perspective NorwegianUniversity Press pp 253ndash277
Hope Hailey V (2001) Breaking the mould Innova-tion as a strategy for corporate renewal Inter-national Journal of Human Resource Management12 1126ndash1140
Hull R Coombs R and Peltu M (2000) Know-ledge management practices for innovation anaudit tool for improvement International Journalof Technology Management 20 633ndash656
Hultink EJ Hart S Robben HSJ and Griffin A(2000) Launch decisions and new product successan empirical comparison of consumer and indus-trial products Journal of Product Innovation Man-agement 17 5ndash23
Jassawalla AR and Sashittal HC (1999) Buildingcollaborative cross-functional new product teamsAcademy of Management Executive 13 50ndash63
Jenkins S Forbes S Durrani TS and BanerjeeSK (1997) Managing the product developmentprocess 1 An assessment International Journal ofTechnology Management 13 359ndash378
Kaplan RS and Norton DP (1992) The balancedscorecard ndash measures that drive performance HarvardBusiness Review JanuaryndashFebruary 71ndash79
Keller RT (1986) Predictors of performance ofproject groups in RampD organizations Academy ofManagement Journal 29 715ndash726
Kelm KM Narayanan VK and Pinches GE (1995)Shareholder value creation during research-and-development innovation and commercialization stagesAcademy of Management Journal 38 770ndash786
Kerssens-van Drongelen IC and Bilderbeek J(1999) RampD performance measurement morethan choosing a set of metrics RampD Management29 35ndash46
Kerssens-van Drongelen IC and de Weerd-Nederhof PC (1999) The use of performancemeasurement tools for balancing short- and long-term NPD performance International Journal ofInnovation Management 3 397ndash426
Kessler EH and Chakrabarti AK (1996) Innova-tion speed a conceptual model of context anteced-ents and outcomes Academy of ManagementReview 21 1143ndash1191
Kim B and Oh H (2002) An effective RampD per-formance measurement system survey of KoreanRampD researchers Omega ndash International Journalof Management Science 30 19ndash31
Kim J and Wilemon D (2002) Strategic issues inmanaging innovationrsquos fuzzy front-end EuropeanJournal of Innovation Management 5 27ndash39
44 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Kimberly JR (1981) Managerial innovation InNystrom PC and Starbuck WH (eds) Handbookof Organizational Design Vol 1 New YorkOxford University Press pp 84ndash104
King N (1992) Modelling the innovation process anempirical comparison of approaches Journal ofOccupational and Organizational Psychology 6589ndash100
Kirton MJ (1976) Adaptors and innovators adescription and measure Journal of Applied Psy-chology 61 622ndash629
Kivimaumlki M Kuk G Elovainio M Thomson LKalliomaumlki-Levanto T and Heikkilauml A (1997)The team climate inventory (TCI) ndash four or fivefactors Testing the structure of TCI in samples oflow and high complexity jobs Journal of Occupa-tional and Organizational Psychology 70 375ndash389
Kivimaumlki M Lansisalmi H Elovainio M Heik-kila A Lindstrom K Harisalo R Sipila K andPuolimatka L (2000) Communication as a deter-minant of organizational innovation RampD Man-agement 30 33ndash42
Kleinknecht A (1987) Measuring RampD in smallfirms how much are we missing Journal of Indus-trial Economics 36 253ndash256
Koen P Ajamian G Burkart R Clamen ADavidson J DrsquoAmore R Elkins C Herald KIncorvia M Johnson A Karol R Seibert RSlavejkov A and Wagner K (2001) Providingclarity and a common language to the lsquofuzzy front endrsquoResearch-Technology Management 44 46ndash55
Koput K (1997) A chaotic model of innovativesearch some answers many questions Organiza-tion Science 8 528ndash542
Lawrence PR and Lorsch JW (1967) Organizationand Environment Harvard MA Harvard Univer-sity Press
Lee M Son B and Lee H (1996) Measuring RampDeffectiveness in Korean companies Research-Technology Management 39 28ndash31
Leonard D and Sensiper S (1998) The role of tacitknowledge in group innovation California Man-agement Review 40 112ndash132
Leseure M Birdi K Bauer J Denyer D andNeely A (2004) Adoption of Promising PracticeA Systematic Review of the Literature LondonAdvanced Institute of Management Research
Li HY and Atuahene-Gima K (2001) Productinnovation strategy and the performance of newtechnology ventures in China Academy of Man-agement Journal 44 1123ndash1134
Liao J Welsch H and Stoica M (2003) Organiza-tional absorptive capacity and responsivenessan empirical investigation of growth-orientedSMEs Entrepreneurship Theory and Practice 2863ndash86
Linstone HA and Turoff M (eds) (2002) The Del-phi Method Techniques and Applications httpwwwisnjitedupubsdelphibook
Loch C Stein L and Terwiesch C (1996) Meas-uring development performance in the electronicsindustry Journal of Product Innovation Manage-ment 13 3ndash20
Mathisen GE and Einarsen S (2004) A review ofinstruments assessing creative and innovative envi-ronments within organizations Creativity ResearchJournal 16 119ndash140
Maylor H (2001) Assessing the relationshipbetween practice changes and process improve-ment in new product development Omega ndashInternational Journal of Management Science 2985ndash96
McAdam RMS (1999) The process of knowledgemanagement within organizations a critical assess-ment of both theory and practice Knowledge andProcess Management 6 101ndash113
McManus RJ Wilson S Delaney BC Fitzmau-rice DA Hyde CJ Tobias RS Jowett S andHobbs FDR (1998) Review of the usefulness ofcontacting other experts when conducting a litera-ture search for systematic reviews British MedicalJournal 317 1562ndash1563
Miles RE and Snow CC (1978) Organization StrategyStructure and Process New York McGraw-Hill
Miller D and Friesen PH (1982) Innovation inconservative and entrepreneurial firms two modelsof strategic momentum Strategic ManagementJournal 3 1ndash24
Mintzberg H (1978) Patterns in strategy formationManagement Science 24 934ndash948
Mitroff I (1987) Business Not As Usual Rethinkingour Individual Corporate and Industrial Strategiesfor Global Competition London Jossey-Bass
Moenaert RK De Meyer A Souder WE andDeschoolmeester D (1995) RampDMarketing com-munication during the fuzzy front-end IEEETransactions on Engineering Management 42243ndash257
Neely A and Hii J (1998) Innovation and BusinessPerformance A Literature Review Report producedfor Government Office for the Eastern RegionCambridge The Judge Institute of ManagementStudies University of Cambridge
copy Blackwell Publishing Ltd 2006 45
March 2006
Nelson R and Winter G (1982) An EvolutionaryTheory of Economic Change Cambridge MABelknap Press
Nohria N and Gulati R (1996) Is slack good or badfor innovation Academy of Management Journal39 1245ndash1264
Nonaka I (1991) The knowledge-creating companyHarvard Business Review NovemberndashDecember96ndash104
Nonaka I and Takeuchi H (1995) The KnowledgeCreating Company How Japanese CompaniesCreate the Dynamics of Innovation New YorkOxford University Press
OrsquoBrien JP (2003) The capital structure implica-tions of pursuing a strategy of innovation StrategicManagement Journal 24 415ndash431
OrsquoReilly CA and Tushman ML (1997) Using cul-ture for strategic advantage promoting innovationthrough social control In Tushman ML andAnderson P (eds) Managing Strategic Innovationand Change A Collection of Readings New YorkOxford University Press pp 200ndash216
Oliver N Dewberry E and Dostaler I (1999) Newproduct development performance and practice aninternational benchmarking study in the consumerelectronics industry In Proceedings 6th Inter-national Product Development Management Confer-ence Cambridge UK Brussels European Institutefor Advanced Studies in Management
Pakes A and Griliches Z (1980) Patents and RampDat the firm level a first report Economic Letters 5377ndash381
Parthasarthy R and Hammond J (2002) Productinnovation input and outcome moderating effectsof the innovation process Journal of Engineeringand Technology Management 19 75ndash91
Patterson F (2003) Innovation potential indicatorAvailable at wwwoppcouk
Phelps B (2004) Smart Business Metrics MeasureWhat Really Counts and Manage What Makes theDifference London FT-Prentice Hall
Pinto JK and Prescott JE (1988) Changes in crit-ical success factors over the stages in the projectlife cycle Journal of Management 14 5ndash18
Pitt M and Clarke K (1999) Competing on compe-tence a knowledge perspective on the managementof strategic innovation Technology Analysis andStrategic Management 11 301ndash316
Pittaway L Robertson M Munir K Denyer D andNeely A (2004) Networking and Innovation in theUK a Systematic Review of the Literature LondonAdvanced Institute of Management Research
Porter ME and Ketels CHM (2003) UK Compet-itiveness Moving to the Next Stage DTI Econom-ics Paper No 3 URN 03899
Pugh DS Hickson DJ Hinings CR and TurnerC (1969) The context of organization structuresAdministrative Science Quarterly 14 91ndash114
Ramanujam V and Mensch GO (1985) Improvingthe strategyndashinnovation link Journal of ProductInnovation Management 2 213ndash223
Richard O McMillan A Chadwick K and DwyerS (2003) Employing an innovation strategy inracially diverse workforces ndash effects on firm per-formance Group amp Organization Management 28107ndash126
Rickards T (1991) Innovation and creativity treesand pathways RampD Management 21 97ndash108
Rochford L (1991) Generating and screening newproduct ideas Industrial Marketing Management20 287ndash296
Rothwell R (1992) Successful industrial innovationcritical factors for the 1990s RampD Management22 221ndash239
Rothwell R Freeman C Horseley A JervisVTP Robertson AB and Townsend J (1974)SAPPHO updated ndash Project SAPPHO phase IIResearch Policy 3 258ndash291
Saleh SD and Wang CK (1993) The managementof innovation ndash strategy structure and organiza-tional climate IEEE Transactions on EngineeringManagement 40 14ndash21
Schmidt RL and Freeland JR (1992) Recentprogress in modelling RampD project-selection proc-esses IEEE Transactions on Engineering Manage-ment 39 189ndash201
Schroeder RG Van de Ven AH Scudder GDand Polley D (1989) The development of innova-tion ideas In Van de Ven AH Angle HL andPoole M (eds) Research on the Management ofInnovation The Minnesota Studies New YorkHarper amp Row pp 107ndash133
Scott S and Bruce R (1994) Determinants ofinnovative behaviour a path model of individualinnovation Academy of Management Journal 37580ndash607
Shane S Venkataraman S and MacMillan I (1995)Cultural differences in innovation championingstrategies Journal of Management 21 931ndash952
Shepard HA (1967) Innovation-resisting and inno-vation producing organizations Journal of Busi-ness 40 470ndash477
Shin J and McClomb GE (1998) Top executiveleadership and organizational innovation an
46 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
empirical investigation of nonprofit human serviceorganizations (HSOS) Administration in SocialWork 22 1ndash21
Single AW and Spurgeon WM (1996) Creatingand commercializing innovation inside a skunkworks Research-Technology Management 39 38ndash41
Song XM and Parry ME (1996) What separatesJapanese new product winners from losersJournal of Product Innovation Management 13422ndash439
Souitaris V (2002) Firm-specific competenciesdetermining technological innovation a survey inGreece RampD Management 32 61ndash77
Stock GN Greis NP and Fischer WA (2001)Absorptive capacity and new product developmentJournal of High Technology ManagementResearch 12 77ndash91
Sundbo J (1997) Management of innovation inservices Service Industries Journal 17 432ndash455
Sveiby KE (1997) The New Organizational WealthManaging and Measuring Knowledge-BasedAssets San Francisco CA Berrett-Koehler
Szakonyi R (1994) Measuring RampD effectiveness IResearch-Technology Management 37 27ndash32
Thompson L (2003) Improving the creativity oforganizational work groups Academy of Manage-ment Executive 17 96ndash109
Tidd J Bessant J and Pavitt K (1997) ManagingInnovation Integrating Technological Market andOrganizational Change Chichester UK JohnWiley
Tipping J and Zeffren E (1995) Assessing thevalue of your technology ResearchndashTechnologyManagement 38 22ndash40
Trajtenberg M (1990) A penny for your quotes ndashpatent citations and the value of innovations RandJournal of Economics 21 172ndash187
Tranfield D Denyer D and Smart P (2003)Towards a methodology for developing evidence-informed management knowledge by means of asystematic review British Journal of Management14 207ndash222
Tsai W (2001) Knowledge transfer in intraorganiza-tional networks effects of network position andabsorptive capacity on business unit innovation andperformance Academy of Management Journal44 996ndash1004
Van Den Bulte C (2000) New product diffusionacceleration measurement and analysis MarketingScience 19 366ndash380
Verhaeghe A and Kfir R (2002) Managing innovationin a knowledge intensive technology organisation(KITO) RampD Management 32 409ndash417
Verworn B (2002) The fuzzy front end of productdevelopment an exploratory study In Proceedings9th International Product Development ManagementConference Sophia Antipolis France pp 863ndash878Brussels European Institute for Advanced Studiesin Management
Veryzer RW (1998) Discontinuous innovation andthe new product development process Journal ofProduct Innovation Management 15 304ndash321
Volberda HW (1996) Towards the flexible formhow to remain vital in hypercompetitive environ-ments Organizational Science 7 359ndash374
Von Hippel E (1986) Lead users a source of novelproduct concepts Management Science 32 791ndash805
Von Zedtwitz M (2002) Organizational learningthrough post-project reviews in RampD RampD Man-agement 32 255ndash268
Voss C Chase R and Roth A (1999) Internationalservice study Decision Line May 4ndash7
Vyakarnam S and Adams RJ (2001) Institutionalbarriers to enterprise support an empirical studyEnvironment and Planning C Government andPolicy 19 335ndash353
Werner BM and Souder WE (1997) MeasuringRampD performance ndash state of the art Research-Technology Management 40 34ndash42
West MA (1990) The social psychology of innova-tion in groups In West MA and Farr JL (eds)Innovation and Creativity at Work Psychologicaland Organizational Strategies Chichester UKJohn Wiley pp 309ndash333
West MA and Anderson NR (1996) Innovation intop management teams Journal of Applied Psychol-ogy 81 680ndash693
White A (2002) Enabling factors in the front end ofthe innovation process In Proceedings 9thInternational Product Development ManagementConference Sophia Antipolis France BrusselsEuropean Institute for Advanced Studies inManagement pp 879ndash887
Wolfe RA (1994) Organizational innovationreview critique and suggested research direc-tions Journal of Management Studies 31 405ndash431
Yoon E and Lilien GL (1985) A new productlaunch-time decision model Journal of ProductInnovation Management 3 134ndash144
Zahra SA and George G (2002) Absorptivecapacity a review reconceptualization and
copy Blackwell Publishing Ltd 2006 47
March 2006
extension Academy of Management Review 27185
Zaltman G Duncan R and Holbek J (1973) Inno-vations and Organizations New York John Wiley
Zien KA and Buckler SA (1997) From experiencedreams to market crafting a culture of innovationJournal of Product Innovation Management 14274ndash287
Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
44 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
Kimberly JR (1981) Managerial innovation InNystrom PC and Starbuck WH (eds) Handbookof Organizational Design Vol 1 New YorkOxford University Press pp 84ndash104
King N (1992) Modelling the innovation process anempirical comparison of approaches Journal ofOccupational and Organizational Psychology 6589ndash100
Kirton MJ (1976) Adaptors and innovators adescription and measure Journal of Applied Psy-chology 61 622ndash629
Kivimaumlki M Kuk G Elovainio M Thomson LKalliomaumlki-Levanto T and Heikkilauml A (1997)The team climate inventory (TCI) ndash four or fivefactors Testing the structure of TCI in samples oflow and high complexity jobs Journal of Occupa-tional and Organizational Psychology 70 375ndash389
Kivimaumlki M Lansisalmi H Elovainio M Heik-kila A Lindstrom K Harisalo R Sipila K andPuolimatka L (2000) Communication as a deter-minant of organizational innovation RampD Man-agement 30 33ndash42
Kleinknecht A (1987) Measuring RampD in smallfirms how much are we missing Journal of Indus-trial Economics 36 253ndash256
Koen P Ajamian G Burkart R Clamen ADavidson J DrsquoAmore R Elkins C Herald KIncorvia M Johnson A Karol R Seibert RSlavejkov A and Wagner K (2001) Providingclarity and a common language to the lsquofuzzy front endrsquoResearch-Technology Management 44 46ndash55
Koput K (1997) A chaotic model of innovativesearch some answers many questions Organiza-tion Science 8 528ndash542
Lawrence PR and Lorsch JW (1967) Organizationand Environment Harvard MA Harvard Univer-sity Press
Lee M Son B and Lee H (1996) Measuring RampDeffectiveness in Korean companies Research-Technology Management 39 28ndash31
Leonard D and Sensiper S (1998) The role of tacitknowledge in group innovation California Man-agement Review 40 112ndash132
Leseure M Birdi K Bauer J Denyer D andNeely A (2004) Adoption of Promising PracticeA Systematic Review of the Literature LondonAdvanced Institute of Management Research
Li HY and Atuahene-Gima K (2001) Productinnovation strategy and the performance of newtechnology ventures in China Academy of Man-agement Journal 44 1123ndash1134
Liao J Welsch H and Stoica M (2003) Organiza-tional absorptive capacity and responsivenessan empirical investigation of growth-orientedSMEs Entrepreneurship Theory and Practice 2863ndash86
Linstone HA and Turoff M (eds) (2002) The Del-phi Method Techniques and Applications httpwwwisnjitedupubsdelphibook
Loch C Stein L and Terwiesch C (1996) Meas-uring development performance in the electronicsindustry Journal of Product Innovation Manage-ment 13 3ndash20
Mathisen GE and Einarsen S (2004) A review ofinstruments assessing creative and innovative envi-ronments within organizations Creativity ResearchJournal 16 119ndash140
Maylor H (2001) Assessing the relationshipbetween practice changes and process improve-ment in new product development Omega ndashInternational Journal of Management Science 2985ndash96
McAdam RMS (1999) The process of knowledgemanagement within organizations a critical assess-ment of both theory and practice Knowledge andProcess Management 6 101ndash113
McManus RJ Wilson S Delaney BC Fitzmau-rice DA Hyde CJ Tobias RS Jowett S andHobbs FDR (1998) Review of the usefulness ofcontacting other experts when conducting a litera-ture search for systematic reviews British MedicalJournal 317 1562ndash1563
Miles RE and Snow CC (1978) Organization StrategyStructure and Process New York McGraw-Hill
Miller D and Friesen PH (1982) Innovation inconservative and entrepreneurial firms two modelsof strategic momentum Strategic ManagementJournal 3 1ndash24
Mintzberg H (1978) Patterns in strategy formationManagement Science 24 934ndash948
Mitroff I (1987) Business Not As Usual Rethinkingour Individual Corporate and Industrial Strategiesfor Global Competition London Jossey-Bass
Moenaert RK De Meyer A Souder WE andDeschoolmeester D (1995) RampDMarketing com-munication during the fuzzy front-end IEEETransactions on Engineering Management 42243ndash257
Neely A and Hii J (1998) Innovation and BusinessPerformance A Literature Review Report producedfor Government Office for the Eastern RegionCambridge The Judge Institute of ManagementStudies University of Cambridge
copy Blackwell Publishing Ltd 2006 45
March 2006
Nelson R and Winter G (1982) An EvolutionaryTheory of Economic Change Cambridge MABelknap Press
Nohria N and Gulati R (1996) Is slack good or badfor innovation Academy of Management Journal39 1245ndash1264
Nonaka I (1991) The knowledge-creating companyHarvard Business Review NovemberndashDecember96ndash104
Nonaka I and Takeuchi H (1995) The KnowledgeCreating Company How Japanese CompaniesCreate the Dynamics of Innovation New YorkOxford University Press
OrsquoBrien JP (2003) The capital structure implica-tions of pursuing a strategy of innovation StrategicManagement Journal 24 415ndash431
OrsquoReilly CA and Tushman ML (1997) Using cul-ture for strategic advantage promoting innovationthrough social control In Tushman ML andAnderson P (eds) Managing Strategic Innovationand Change A Collection of Readings New YorkOxford University Press pp 200ndash216
Oliver N Dewberry E and Dostaler I (1999) Newproduct development performance and practice aninternational benchmarking study in the consumerelectronics industry In Proceedings 6th Inter-national Product Development Management Confer-ence Cambridge UK Brussels European Institutefor Advanced Studies in Management
Pakes A and Griliches Z (1980) Patents and RampDat the firm level a first report Economic Letters 5377ndash381
Parthasarthy R and Hammond J (2002) Productinnovation input and outcome moderating effectsof the innovation process Journal of Engineeringand Technology Management 19 75ndash91
Patterson F (2003) Innovation potential indicatorAvailable at wwwoppcouk
Phelps B (2004) Smart Business Metrics MeasureWhat Really Counts and Manage What Makes theDifference London FT-Prentice Hall
Pinto JK and Prescott JE (1988) Changes in crit-ical success factors over the stages in the projectlife cycle Journal of Management 14 5ndash18
Pitt M and Clarke K (1999) Competing on compe-tence a knowledge perspective on the managementof strategic innovation Technology Analysis andStrategic Management 11 301ndash316
Pittaway L Robertson M Munir K Denyer D andNeely A (2004) Networking and Innovation in theUK a Systematic Review of the Literature LondonAdvanced Institute of Management Research
Porter ME and Ketels CHM (2003) UK Compet-itiveness Moving to the Next Stage DTI Econom-ics Paper No 3 URN 03899
Pugh DS Hickson DJ Hinings CR and TurnerC (1969) The context of organization structuresAdministrative Science Quarterly 14 91ndash114
Ramanujam V and Mensch GO (1985) Improvingthe strategyndashinnovation link Journal of ProductInnovation Management 2 213ndash223
Richard O McMillan A Chadwick K and DwyerS (2003) Employing an innovation strategy inracially diverse workforces ndash effects on firm per-formance Group amp Organization Management 28107ndash126
Rickards T (1991) Innovation and creativity treesand pathways RampD Management 21 97ndash108
Rochford L (1991) Generating and screening newproduct ideas Industrial Marketing Management20 287ndash296
Rothwell R (1992) Successful industrial innovationcritical factors for the 1990s RampD Management22 221ndash239
Rothwell R Freeman C Horseley A JervisVTP Robertson AB and Townsend J (1974)SAPPHO updated ndash Project SAPPHO phase IIResearch Policy 3 258ndash291
Saleh SD and Wang CK (1993) The managementof innovation ndash strategy structure and organiza-tional climate IEEE Transactions on EngineeringManagement 40 14ndash21
Schmidt RL and Freeland JR (1992) Recentprogress in modelling RampD project-selection proc-esses IEEE Transactions on Engineering Manage-ment 39 189ndash201
Schroeder RG Van de Ven AH Scudder GDand Polley D (1989) The development of innova-tion ideas In Van de Ven AH Angle HL andPoole M (eds) Research on the Management ofInnovation The Minnesota Studies New YorkHarper amp Row pp 107ndash133
Scott S and Bruce R (1994) Determinants ofinnovative behaviour a path model of individualinnovation Academy of Management Journal 37580ndash607
Shane S Venkataraman S and MacMillan I (1995)Cultural differences in innovation championingstrategies Journal of Management 21 931ndash952
Shepard HA (1967) Innovation-resisting and inno-vation producing organizations Journal of Busi-ness 40 470ndash477
Shin J and McClomb GE (1998) Top executiveleadership and organizational innovation an
46 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
empirical investigation of nonprofit human serviceorganizations (HSOS) Administration in SocialWork 22 1ndash21
Single AW and Spurgeon WM (1996) Creatingand commercializing innovation inside a skunkworks Research-Technology Management 39 38ndash41
Song XM and Parry ME (1996) What separatesJapanese new product winners from losersJournal of Product Innovation Management 13422ndash439
Souitaris V (2002) Firm-specific competenciesdetermining technological innovation a survey inGreece RampD Management 32 61ndash77
Stock GN Greis NP and Fischer WA (2001)Absorptive capacity and new product developmentJournal of High Technology ManagementResearch 12 77ndash91
Sundbo J (1997) Management of innovation inservices Service Industries Journal 17 432ndash455
Sveiby KE (1997) The New Organizational WealthManaging and Measuring Knowledge-BasedAssets San Francisco CA Berrett-Koehler
Szakonyi R (1994) Measuring RampD effectiveness IResearch-Technology Management 37 27ndash32
Thompson L (2003) Improving the creativity oforganizational work groups Academy of Manage-ment Executive 17 96ndash109
Tidd J Bessant J and Pavitt K (1997) ManagingInnovation Integrating Technological Market andOrganizational Change Chichester UK JohnWiley
Tipping J and Zeffren E (1995) Assessing thevalue of your technology ResearchndashTechnologyManagement 38 22ndash40
Trajtenberg M (1990) A penny for your quotes ndashpatent citations and the value of innovations RandJournal of Economics 21 172ndash187
Tranfield D Denyer D and Smart P (2003)Towards a methodology for developing evidence-informed management knowledge by means of asystematic review British Journal of Management14 207ndash222
Tsai W (2001) Knowledge transfer in intraorganiza-tional networks effects of network position andabsorptive capacity on business unit innovation andperformance Academy of Management Journal44 996ndash1004
Van Den Bulte C (2000) New product diffusionacceleration measurement and analysis MarketingScience 19 366ndash380
Verhaeghe A and Kfir R (2002) Managing innovationin a knowledge intensive technology organisation(KITO) RampD Management 32 409ndash417
Verworn B (2002) The fuzzy front end of productdevelopment an exploratory study In Proceedings9th International Product Development ManagementConference Sophia Antipolis France pp 863ndash878Brussels European Institute for Advanced Studiesin Management
Veryzer RW (1998) Discontinuous innovation andthe new product development process Journal ofProduct Innovation Management 15 304ndash321
Volberda HW (1996) Towards the flexible formhow to remain vital in hypercompetitive environ-ments Organizational Science 7 359ndash374
Von Hippel E (1986) Lead users a source of novelproduct concepts Management Science 32 791ndash805
Von Zedtwitz M (2002) Organizational learningthrough post-project reviews in RampD RampD Man-agement 32 255ndash268
Voss C Chase R and Roth A (1999) Internationalservice study Decision Line May 4ndash7
Vyakarnam S and Adams RJ (2001) Institutionalbarriers to enterprise support an empirical studyEnvironment and Planning C Government andPolicy 19 335ndash353
Werner BM and Souder WE (1997) MeasuringRampD performance ndash state of the art Research-Technology Management 40 34ndash42
West MA (1990) The social psychology of innova-tion in groups In West MA and Farr JL (eds)Innovation and Creativity at Work Psychologicaland Organizational Strategies Chichester UKJohn Wiley pp 309ndash333
West MA and Anderson NR (1996) Innovation intop management teams Journal of Applied Psychol-ogy 81 680ndash693
White A (2002) Enabling factors in the front end ofthe innovation process In Proceedings 9thInternational Product Development ManagementConference Sophia Antipolis France BrusselsEuropean Institute for Advanced Studies inManagement pp 879ndash887
Wolfe RA (1994) Organizational innovationreview critique and suggested research direc-tions Journal of Management Studies 31 405ndash431
Yoon E and Lilien GL (1985) A new productlaunch-time decision model Journal of ProductInnovation Management 3 134ndash144
Zahra SA and George G (2002) Absorptivecapacity a review reconceptualization and
copy Blackwell Publishing Ltd 2006 47
March 2006
extension Academy of Management Review 27185
Zaltman G Duncan R and Holbek J (1973) Inno-vations and Organizations New York John Wiley
Zien KA and Buckler SA (1997) From experiencedreams to market crafting a culture of innovationJournal of Product Innovation Management 14274ndash287
Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
copy Blackwell Publishing Ltd 2006 45
March 2006
Nelson R and Winter G (1982) An EvolutionaryTheory of Economic Change Cambridge MABelknap Press
Nohria N and Gulati R (1996) Is slack good or badfor innovation Academy of Management Journal39 1245ndash1264
Nonaka I (1991) The knowledge-creating companyHarvard Business Review NovemberndashDecember96ndash104
Nonaka I and Takeuchi H (1995) The KnowledgeCreating Company How Japanese CompaniesCreate the Dynamics of Innovation New YorkOxford University Press
OrsquoBrien JP (2003) The capital structure implica-tions of pursuing a strategy of innovation StrategicManagement Journal 24 415ndash431
OrsquoReilly CA and Tushman ML (1997) Using cul-ture for strategic advantage promoting innovationthrough social control In Tushman ML andAnderson P (eds) Managing Strategic Innovationand Change A Collection of Readings New YorkOxford University Press pp 200ndash216
Oliver N Dewberry E and Dostaler I (1999) Newproduct development performance and practice aninternational benchmarking study in the consumerelectronics industry In Proceedings 6th Inter-national Product Development Management Confer-ence Cambridge UK Brussels European Institutefor Advanced Studies in Management
Pakes A and Griliches Z (1980) Patents and RampDat the firm level a first report Economic Letters 5377ndash381
Parthasarthy R and Hammond J (2002) Productinnovation input and outcome moderating effectsof the innovation process Journal of Engineeringand Technology Management 19 75ndash91
Patterson F (2003) Innovation potential indicatorAvailable at wwwoppcouk
Phelps B (2004) Smart Business Metrics MeasureWhat Really Counts and Manage What Makes theDifference London FT-Prentice Hall
Pinto JK and Prescott JE (1988) Changes in crit-ical success factors over the stages in the projectlife cycle Journal of Management 14 5ndash18
Pitt M and Clarke K (1999) Competing on compe-tence a knowledge perspective on the managementof strategic innovation Technology Analysis andStrategic Management 11 301ndash316
Pittaway L Robertson M Munir K Denyer D andNeely A (2004) Networking and Innovation in theUK a Systematic Review of the Literature LondonAdvanced Institute of Management Research
Porter ME and Ketels CHM (2003) UK Compet-itiveness Moving to the Next Stage DTI Econom-ics Paper No 3 URN 03899
Pugh DS Hickson DJ Hinings CR and TurnerC (1969) The context of organization structuresAdministrative Science Quarterly 14 91ndash114
Ramanujam V and Mensch GO (1985) Improvingthe strategyndashinnovation link Journal of ProductInnovation Management 2 213ndash223
Richard O McMillan A Chadwick K and DwyerS (2003) Employing an innovation strategy inracially diverse workforces ndash effects on firm per-formance Group amp Organization Management 28107ndash126
Rickards T (1991) Innovation and creativity treesand pathways RampD Management 21 97ndash108
Rochford L (1991) Generating and screening newproduct ideas Industrial Marketing Management20 287ndash296
Rothwell R (1992) Successful industrial innovationcritical factors for the 1990s RampD Management22 221ndash239
Rothwell R Freeman C Horseley A JervisVTP Robertson AB and Townsend J (1974)SAPPHO updated ndash Project SAPPHO phase IIResearch Policy 3 258ndash291
Saleh SD and Wang CK (1993) The managementof innovation ndash strategy structure and organiza-tional climate IEEE Transactions on EngineeringManagement 40 14ndash21
Schmidt RL and Freeland JR (1992) Recentprogress in modelling RampD project-selection proc-esses IEEE Transactions on Engineering Manage-ment 39 189ndash201
Schroeder RG Van de Ven AH Scudder GDand Polley D (1989) The development of innova-tion ideas In Van de Ven AH Angle HL andPoole M (eds) Research on the Management ofInnovation The Minnesota Studies New YorkHarper amp Row pp 107ndash133
Scott S and Bruce R (1994) Determinants ofinnovative behaviour a path model of individualinnovation Academy of Management Journal 37580ndash607
Shane S Venkataraman S and MacMillan I (1995)Cultural differences in innovation championingstrategies Journal of Management 21 931ndash952
Shepard HA (1967) Innovation-resisting and inno-vation producing organizations Journal of Busi-ness 40 470ndash477
Shin J and McClomb GE (1998) Top executiveleadership and organizational innovation an
46 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
empirical investigation of nonprofit human serviceorganizations (HSOS) Administration in SocialWork 22 1ndash21
Single AW and Spurgeon WM (1996) Creatingand commercializing innovation inside a skunkworks Research-Technology Management 39 38ndash41
Song XM and Parry ME (1996) What separatesJapanese new product winners from losersJournal of Product Innovation Management 13422ndash439
Souitaris V (2002) Firm-specific competenciesdetermining technological innovation a survey inGreece RampD Management 32 61ndash77
Stock GN Greis NP and Fischer WA (2001)Absorptive capacity and new product developmentJournal of High Technology ManagementResearch 12 77ndash91
Sundbo J (1997) Management of innovation inservices Service Industries Journal 17 432ndash455
Sveiby KE (1997) The New Organizational WealthManaging and Measuring Knowledge-BasedAssets San Francisco CA Berrett-Koehler
Szakonyi R (1994) Measuring RampD effectiveness IResearch-Technology Management 37 27ndash32
Thompson L (2003) Improving the creativity oforganizational work groups Academy of Manage-ment Executive 17 96ndash109
Tidd J Bessant J and Pavitt K (1997) ManagingInnovation Integrating Technological Market andOrganizational Change Chichester UK JohnWiley
Tipping J and Zeffren E (1995) Assessing thevalue of your technology ResearchndashTechnologyManagement 38 22ndash40
Trajtenberg M (1990) A penny for your quotes ndashpatent citations and the value of innovations RandJournal of Economics 21 172ndash187
Tranfield D Denyer D and Smart P (2003)Towards a methodology for developing evidence-informed management knowledge by means of asystematic review British Journal of Management14 207ndash222
Tsai W (2001) Knowledge transfer in intraorganiza-tional networks effects of network position andabsorptive capacity on business unit innovation andperformance Academy of Management Journal44 996ndash1004
Van Den Bulte C (2000) New product diffusionacceleration measurement and analysis MarketingScience 19 366ndash380
Verhaeghe A and Kfir R (2002) Managing innovationin a knowledge intensive technology organisation(KITO) RampD Management 32 409ndash417
Verworn B (2002) The fuzzy front end of productdevelopment an exploratory study In Proceedings9th International Product Development ManagementConference Sophia Antipolis France pp 863ndash878Brussels European Institute for Advanced Studiesin Management
Veryzer RW (1998) Discontinuous innovation andthe new product development process Journal ofProduct Innovation Management 15 304ndash321
Volberda HW (1996) Towards the flexible formhow to remain vital in hypercompetitive environ-ments Organizational Science 7 359ndash374
Von Hippel E (1986) Lead users a source of novelproduct concepts Management Science 32 791ndash805
Von Zedtwitz M (2002) Organizational learningthrough post-project reviews in RampD RampD Man-agement 32 255ndash268
Voss C Chase R and Roth A (1999) Internationalservice study Decision Line May 4ndash7
Vyakarnam S and Adams RJ (2001) Institutionalbarriers to enterprise support an empirical studyEnvironment and Planning C Government andPolicy 19 335ndash353
Werner BM and Souder WE (1997) MeasuringRampD performance ndash state of the art Research-Technology Management 40 34ndash42
West MA (1990) The social psychology of innova-tion in groups In West MA and Farr JL (eds)Innovation and Creativity at Work Psychologicaland Organizational Strategies Chichester UKJohn Wiley pp 309ndash333
West MA and Anderson NR (1996) Innovation intop management teams Journal of Applied Psychol-ogy 81 680ndash693
White A (2002) Enabling factors in the front end ofthe innovation process In Proceedings 9thInternational Product Development ManagementConference Sophia Antipolis France BrusselsEuropean Institute for Advanced Studies inManagement pp 879ndash887
Wolfe RA (1994) Organizational innovationreview critique and suggested research direc-tions Journal of Management Studies 31 405ndash431
Yoon E and Lilien GL (1985) A new productlaunch-time decision model Journal of ProductInnovation Management 3 134ndash144
Zahra SA and George G (2002) Absorptivecapacity a review reconceptualization and
copy Blackwell Publishing Ltd 2006 47
March 2006
extension Academy of Management Review 27185
Zaltman G Duncan R and Holbek J (1973) Inno-vations and Organizations New York John Wiley
Zien KA and Buckler SA (1997) From experiencedreams to market crafting a culture of innovationJournal of Product Innovation Management 14274ndash287
Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
46 copy Blackwell Publishing Ltd 2006
Innovation management measurement A review
empirical investigation of nonprofit human serviceorganizations (HSOS) Administration in SocialWork 22 1ndash21
Single AW and Spurgeon WM (1996) Creatingand commercializing innovation inside a skunkworks Research-Technology Management 39 38ndash41
Song XM and Parry ME (1996) What separatesJapanese new product winners from losersJournal of Product Innovation Management 13422ndash439
Souitaris V (2002) Firm-specific competenciesdetermining technological innovation a survey inGreece RampD Management 32 61ndash77
Stock GN Greis NP and Fischer WA (2001)Absorptive capacity and new product developmentJournal of High Technology ManagementResearch 12 77ndash91
Sundbo J (1997) Management of innovation inservices Service Industries Journal 17 432ndash455
Sveiby KE (1997) The New Organizational WealthManaging and Measuring Knowledge-BasedAssets San Francisco CA Berrett-Koehler
Szakonyi R (1994) Measuring RampD effectiveness IResearch-Technology Management 37 27ndash32
Thompson L (2003) Improving the creativity oforganizational work groups Academy of Manage-ment Executive 17 96ndash109
Tidd J Bessant J and Pavitt K (1997) ManagingInnovation Integrating Technological Market andOrganizational Change Chichester UK JohnWiley
Tipping J and Zeffren E (1995) Assessing thevalue of your technology ResearchndashTechnologyManagement 38 22ndash40
Trajtenberg M (1990) A penny for your quotes ndashpatent citations and the value of innovations RandJournal of Economics 21 172ndash187
Tranfield D Denyer D and Smart P (2003)Towards a methodology for developing evidence-informed management knowledge by means of asystematic review British Journal of Management14 207ndash222
Tsai W (2001) Knowledge transfer in intraorganiza-tional networks effects of network position andabsorptive capacity on business unit innovation andperformance Academy of Management Journal44 996ndash1004
Van Den Bulte C (2000) New product diffusionacceleration measurement and analysis MarketingScience 19 366ndash380
Verhaeghe A and Kfir R (2002) Managing innovationin a knowledge intensive technology organisation(KITO) RampD Management 32 409ndash417
Verworn B (2002) The fuzzy front end of productdevelopment an exploratory study In Proceedings9th International Product Development ManagementConference Sophia Antipolis France pp 863ndash878Brussels European Institute for Advanced Studiesin Management
Veryzer RW (1998) Discontinuous innovation andthe new product development process Journal ofProduct Innovation Management 15 304ndash321
Volberda HW (1996) Towards the flexible formhow to remain vital in hypercompetitive environ-ments Organizational Science 7 359ndash374
Von Hippel E (1986) Lead users a source of novelproduct concepts Management Science 32 791ndash805
Von Zedtwitz M (2002) Organizational learningthrough post-project reviews in RampD RampD Man-agement 32 255ndash268
Voss C Chase R and Roth A (1999) Internationalservice study Decision Line May 4ndash7
Vyakarnam S and Adams RJ (2001) Institutionalbarriers to enterprise support an empirical studyEnvironment and Planning C Government andPolicy 19 335ndash353
Werner BM and Souder WE (1997) MeasuringRampD performance ndash state of the art Research-Technology Management 40 34ndash42
West MA (1990) The social psychology of innova-tion in groups In West MA and Farr JL (eds)Innovation and Creativity at Work Psychologicaland Organizational Strategies Chichester UKJohn Wiley pp 309ndash333
West MA and Anderson NR (1996) Innovation intop management teams Journal of Applied Psychol-ogy 81 680ndash693
White A (2002) Enabling factors in the front end ofthe innovation process In Proceedings 9thInternational Product Development ManagementConference Sophia Antipolis France BrusselsEuropean Institute for Advanced Studies inManagement pp 879ndash887
Wolfe RA (1994) Organizational innovationreview critique and suggested research direc-tions Journal of Management Studies 31 405ndash431
Yoon E and Lilien GL (1985) A new productlaunch-time decision model Journal of ProductInnovation Management 3 134ndash144
Zahra SA and George G (2002) Absorptivecapacity a review reconceptualization and
copy Blackwell Publishing Ltd 2006 47
March 2006
extension Academy of Management Review 27185
Zaltman G Duncan R and Holbek J (1973) Inno-vations and Organizations New York John Wiley
Zien KA and Buckler SA (1997) From experiencedreams to market crafting a culture of innovationJournal of Product Innovation Management 14274ndash287
Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
copy Blackwell Publishing Ltd 2006 47
March 2006
extension Academy of Management Review 27185
Zaltman G Duncan R and Holbek J (1973) Inno-vations and Organizations New York John Wiley
Zien KA and Buckler SA (1997) From experiencedreams to market crafting a culture of innovationJournal of Product Innovation Management 14274ndash287
Richard Adams and John Bessant are from the Innovation Studies Centre Tanaka Business School Imperial College London South Kensington Campus London SW7 2AZ UK Robert Phelps is from Cranfield School of Management Cranfield Beds MK43 0AL UK
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