Incentives and performance measures for open innovation practices
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Date
2014Metadata
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Original version
Breunig, K.J., Aas, T.H. & Hydle, K.M. (2014). Incentives and performance measures for open innovation practices. Measuring Business Excellence, 18(1), 45-54. doi:10.1108/MBE-10-2013-0049 http://dx.doi.org/10.1108/MBE-10-2013-0049Abstract
Purpose – To guarantee alignment between ongoing activities and organizational goals, innovation
management theory emphasizes management control and explicit innovation strategies as
prerequisites for innovation performance. However, the theory on open services innovation
emphasizes individual autonomy and incentives to foster open innovations. The aim of this paper is to
explore this inconsistency.
Design/methodology/approach – An explorative research design involving 25 semi-structured
interviews in five large scale-intensive service firms is explored. Scale-intensive service firms are
strategically sampled for this study since these firms experience tension between open service
innovation characteristics and efforts to standardize.
Findings – The authors show how individual autonomy facilitates the internal and external networking
required in open innovations. However, individualized incentives do not suffice to motivate, mobilize and
direct the collaboration and collective effort needed to ensure successful implementation of open
innovation processes. Innovation performance is a collective effort, and the findings suggest that firms’
business strategy works as a collective incentive system.
Practical implications – The findings imply that firms should not rely on individualized incentives alone
to implement open innovation processes successfully. The implementation of more collectively oriented
incentives is also necessary to motivate the collective effort required to succeed with open innovation.
Originality/value – The study extends previous work and shows how innovation practices are collective
efforts that also involve the mobilization of external resources. The incentives observed have an effect on
individual behaviour, while performance measures, to a larger degree, cater to the collective level. The
authors present three propositions for further empirical investigation