1.1.1. Evolution up until the 1990s

Up until the 1990s, some major authors (Evan, 1966; Evan and Black, 1967; Downs and Mohr, 1976; Daft, 1978; Kimberly, 1981; Damanpour, 1988; Van de Ven, 1986; Harrow and Willcocks, 1990; Rogers, 1995) were primarily interested in innovations which did not have a technological character. We will see that this aspect of innovation is particularly enriched by diverse thoughts, showing throughout that the accumulation of knowledge truly allows advances in the understanding of particular phenomena.

The first authors (1960s to 1980s) did not yet strictly speaking use the term managerial innovation, but rather organizational or administrative innovation, in reference to Schumpeter. They attempted to describe non-technological innovations as new organizational methods and practices. In particular, their works show the emergence of the perspective of “adoption” of organizational innovation, an important concept in the context of this work.

In particular, it is with Kimberly in 1981 that an essential turning point occurs. For the first time in the literature, he introduced the expression “managerial innovation”, seeking precisely to distinguish this latter from all other forms of innovation. He defined it as: “any program, product or technique which represents a significant departure from the state of management at the moment where it appears for the first time and where it affects the nature, location, or the quantity of information available in a decision-making process”.

For this author, speaking of “managerial innovation“ instead of “organizational innovation” aims to take into account the concept, not only as a method or a practice (organization), but also as a vehicle whose appropriation is motivated by a goal (strategy). This approach capitalizing on the managerial dimension allows us to take into account not only an organizational dimension, but also a strategic dimension, and consequently to explore numerous questions such as invention, adoption or even dissemination.

In the 1980s and 1990s, other authors clarified the distinctive characteristics of MI with regard to all other forms of innovation. This involved grounding MI in the field of enterprise management, particularly by integrating the perceptions of actors about the character of novelty. This point, far from being anecdotal, is a valuable base for understanding behavior with respect to a new structure appearing in the overall organization of the company.

1.1.2. The 2000s: democratization of the concept

The democratization of the term and the regrowth of interest in the concept appeared in the 2000s and specifically in 2008 with Hamel, Mol and Birkinshaw. These three authors, from the London Business School, founded the Innovation Management Lab to carry out in-depth research into the concept. As such, the foundation was already a revolution in the universe of academic research, and a model for what business would later do under the name of transformation departments. Companies have in fact been equipped for a few years with transformation departments, whose main purpose is to be laboratories for the evolution of organizations.

Over a decade, inspired by the activism of the Innovation Management Lab, definitions of the concept have been clarified by different authors (Hamel, 2006; Birkinshaw, Hamel and Mol, 2008; Mol and Birkinshaw, 2009; Damanpour and Aravind, 2012; Le Roy et al., 2013), integrating several fundamental elements into the analysis: the performance of the company and the different meanings of the concept of “novelty”.

First of all, on the notion of “performance”, since 2006 the idea has been advanced that the concept of MI would be a major source of competitive advantage. In 2008, Birkinshaw, Hamel and Mol furthermore defined MI as follows: “the invention and implementation of a managerial practice, process, structure or technique, which is new in relation to the state of the art and which aims to promote the goals of the organization”. This definition clearly advances two essential traits of MI: its novelty in relation to what exists, that is, the state of the art of a practice, a process or a structure; and the goal of the company, that is, the contribution of managerial innovation to the company’s performance. This point would be furthermore developed and affirmed as one of the fundamental motivations of MI. In fact, MI allows the company to develop unique competences, and competitive advantages as a consequence. In this perspective, MI is linked to the resources and expertise of the business. The resource-based approach thus allows us to enrich the analysis of MI in a more strategic dimension.

On the concept of “novelty”, we have to emphasize that it constitutes a point of convergence for the different definitions of MI, and was further enriched by Le Roy et al., in 2013. The latter, relying on all the existing definitions in the recent literature, proposed the following definition: “Managerial innovation is the adoption, by an organization, of practices and methods of management which are new to it, in the goal of improving its overall performance”. The interest of this definition, besides the fact that it includes the angle of “new practices” and the angle of an ambition associated with it, also covers two meanings of the concept. “It is as much the invention of a new method or practice of management by an organization, as the adoption of a method or practice of management which already exists but is new to the organization adopting it”. Furthermore, by means of this definition, the authors underline the relative character of novelty, as what is new for a given company will not necessarily be so for another. This is an essential point, in the sense that in a world where everyone is being observed, companies adopt new structures because they are influenced by those who have preceded them in the relevant field. This no doubt explains why so many companies set up structures which are in fashion, while having only a fragmentary knowledge of how to do so. “First we launch, then we’ll see” is a lesson from many cases which I will deal with in this book on CI, which we will subsequently reconcile with MI.

Do not forget that a structure concept, when it arrives at the doors of a company to be implemented, still needs some adaptations in the latter context. It is not sufficient, for example, to want to launch an MI to know how to do so. This therefore invites us to further investigate the characteristics of MI.

1.1.3. The characteristics of MI

Based on existing works, we can divide up representative definitions of the evolution of the concept of MI and make a very fine analysis of them. This approach involves recalling how the concept has gradually developed up until its most modern form and extracting its main characteristics.

The above definitions are among the best known. They highlight several aspects of MI. First of all, MI relates to the operational level and concerns the effective implementation of new practices and methods. Then, the innovative character of MI must be understood relative to the state of the art (in absolute terms) and relative to the company adopting it. Finally, MI is developed for a specific purpose which suggests intentionality: the group that develops an MI does so generally to improve its performance, that is, to be more innovative. These different elements, as we will see, correspond to a managerial reality.

1.2.1. The Oslo Manual

The OECD’s Oslo Manual (OECD, 2005b) suggests some guiding principles concerning the collection and interpretation of data on innovation. Its first edition dates from 1992 and covered technological innovation for products and processes. It was not until 2005, with the release of its third edition, that non-technological innovation made its first appearance, as well as the links between different types of innovation. This manual is used as a guide for the drafting and tallying of the questionnaire for the CIS survey, carried out every two years among the current 28 European states. This survey was piloted in France by INSEE, by chance one of the institutions where I had the good fortune to hold a long-term internship during my youth. To those who would ask me: “what about a more recent study?”, I reply: “I have not found any more recent”, let this be said!

1.2.2. The results of the CIS 2010 survey

The CIS study (INSEE, 2010) produced results which I share with you through the figure and table below. This figure, like the table, is very evocative of the situation of innovation in general and in terms of management.

Figure 1.1 shows the positions of companies, between 2008 and 2010, on the subject of innovation.

In the first place, this study shows us that during the years 2008 to 2010, 49% of companies on the market with 10 or more employees, based in France, innovated. This involves innovation in the broad sense, that is, concerning the creation or improvement of products (goods or delivery of services), and concerning processes of production, modes of organization or even strategies. Innovation in the broad sense, although it concerns all types (sizes) of structures, seems particularly pronounced in the larger structures (80% of companies with more than 250 employees). Among enterprises with between 50 and 249 employees, 63% of them claim to have “innovated”. Finally, out of those who count 10 to 49 employees, we reach a rate of 45%. The greater level of resources for enterprises of larger size might explain this trend. In any case, one of the elements of the conclusion of this study seems to be that “size” and “innovation” are two closely related dimensions; the larger a firm in size, the more it innovates.

Concerning sectors of activity, leading-edge and financial sectors seem to innovate more (more than 50%) than more traditional sectors. In leading-edge and financial sectors, the more intense competitive environment might explain this tendency to innovate preserving or developing competitive advantages and performance. It would therefore seem, on the basis of these results, that the more “modern” the sector in which a company develops, the more it innovates. To go further into the analysis, it is helpful to investigate the nature of innovations as a function of the size of companies.

Table 1.2 shows that the most common innovations involve modes of organization, with 35% of companies concerned. This most often involves methods of organizing work and of decision-making. Again, on this point, it is the largest structures which seem to have the strongest propensity for organizational innovation (59% of structures with more than 250 employees). For enterprises with 50 to 249 employees, this study reveals that 44% of them innovate at the organizational level and 32% in the case of structures having 10 to 49 employees. Based on this study, it would therefore seem that the larger the size of a firm, the more it is inclined to innovate at the level of its organizational design. This point may be explained in particular by the fact that large firms have more resources, which may be mobilized to support organizational innovations.

I invite you to hold onto three essential points: the first is the propensity of all companies to innovate and in particular companies in sectors said to be “leading-edge” such as the financial sector; the second is the propensity of companies to innovate more at the organizational level than in other fields (processes, products, marketing); and the third is the propensity of large-scale companies to innovate (regardless of the type of innovation) more than others (medium-sized, small-sized). We can therefore take this survey as a marker which allows us to appreciate the importance of organizational innovation in the world of firms. This managerial reality thus deserves our attention and will become even clearer to your eyes through some illustrations.

1.2.3. Various illustrations

The nature of the MIs conceived and adopted by companies covers many areas, as shown in Table 1.3. I do not doubt that some of these innovations will speak to numerous managers, who use them without actually knowing that these are managerial innovations. What is the use of knowing this, you ask me? Without doubt, this knowledge would have better prepared these managers to adopt them. They would have been prepared for calculated efforts to get there without falling into time-consuming activities, with some not understanding why a fashionable “MI” required so much effort, or with others abandoning them for the wrong reasons. Effectiveness is good, and efficiency is better. The basis of efficiency is not “believing” but “knowing”, and in particular “know-how”.

For each of these 11 cases, the authors also provide us with the date and the name of the person or persons who they consider to be the inventor. These researchers thus give MI the full status of an innovation, in the same way as for technological innovations.

For practitioners who have wanted to apply some of these MIs, I raise the question of how many of them have really focused on everything written above. Of course, this does not mean reading everything, but at least understanding the mysteries and anticipating difficulties of implementation. From a more academic point of view, it is also an important point in the sense that identifying at least the “what”, the “who” and the “when” allows us to qualify the character of the novelty as absolute or as relative. In fact, to take only two examples, the “Balance Score Card” and the “Six Sigma Method”, these two managerial innovations have been widely disseminated among companies since their conception, compared to the first to experiment with them with success or failure.

We must, however, note that among these 11 MIs, open innovation has not been referred to as such. It thus seems more useful to me, rather than directly assimilating OI to an MI, to first further explore this aspect and in particular to establish the connections between the concept of OI and that of MI on the basis of existing work. Shortcuts, as I explained at the beginning of the chapter, are something I always try to avoid. Taking shortcuts does not save time in the context of an approach that we know to be long term by nature.

1.3.1. Research directions on OI

Research on OI has followed different paths, which testifies to the multidimensional nature of the concept of openness. To prove this, I offer you a brief exploration of the research directions (Randhawa, Wilden and Hohberger, 2016) on OI. These authors have done a fantastic job of synthesis.

The first and predominant direction centers on the company as such. It is this type of research that has received the most attention from researchers. The latter emphasize the role of knowledge, of technology and of R&D for a company wishing to get involved in OI. Researchers must understand how companies can stretch their limits in collaborating with external entities through the transfer of knowledge and exchange of knowledge. This research direction remains very much grounded in what OI is and is expressed at a macro level of analysis: the firms. These latter more precisely seek out resources which are complementary to their own R&D through technological alliances and partnerships which they contract with suppliers, clients and partners. To do this, they explore, exploit and exchange knowledge and technologies. Elements relating to the “work” actually carried out by these actors have been neglected, in spite of the deepening of the “network” aspect of OI which we will discuss below.

The second direction concerns the management of networks of OI. Overall, this is a little-explored line of research which may deal with the management of industrial networks through corporate ventures, spin-offs, associated alliances and partnerships, the creation of sustainable business models or mechanisms of appropriation of OI structures and their governance, or patents. These works always adopt a “macro” perspective: the company and its global organization. A whole segment of the research on relationships between the different partners in OI networks seems to be limited to this day, except for Huggins who in 2010 evoked the notion of “network-capital”, which he defines as an investment which puts firms together and which aims to promote access to knowledge in order to improve economic performance. Social relationships, although they are dealt with, nevertheless are still always handled in a “macro” perspective centered on the firm (reification) and not on the interactions between the individuals in the firm.

Finally, the third direction of OI research deals with the role of users and communities in OI. This research perspective, as with the previous one, has received little attention from researchers, even if it is considered by some to be a real theme. The literature suggests, for example, that involving individual users enrolled in collaborative innovation structures might prove to be a useful solution for businesses. In this perspective, some studies focus on the integration of user ideas into the design of new products and their development. The role of communities is, however, neglected. When researchers do discuss it, it is in the perspective of the context of so-called open-source software projects. If you are not an engineer, skip this one, because studies have then dealt with the profits resulting from the accumulation of services by companies in this open-source software area. Studies on OI communities and the role of participants, their interactions and behaviors, remain very limited to this day, even if it has happened that some leaders of organizational transformation in firms, who act as catalysts for developing OI, have been highlighted, they describe the individual, but not the work actually carried out to contribute to organizational change.

1.3.2. New research perspectives on OI

Across these different research directions, OI seems to be a subject for specialists and has dealt with a limited number of questions, whose opportunities for activation in the business world remain just as limited.

It seems desirable to me to get more diversity and depth on other axes or dimensions of OI. Marketing (e.g. the logic of services), organizational behavior (e.g. communities of practice) and management (e.g. dynamic capabilities) offer useful theoretical prisms through which to further explore the very foundations of OI. Possible opportunities for activation in the business world are enriched, and it is in this vein that I wanted to capitalize in particular on the illumination which translation, managerial adaptation and institutional work might bring to OI, as indicated in the introduction.

Let us descend somewhat into the concrete and return in greater detail to the characteristics of OI.

1.3.3. Characteristics of OI

The fundamental elements proposed by Chesbrough in 2003 in his seminal work are useful for the analysis. The first fundamental element is, according to this author, the “culture” of the firm. He believes that open innovation cannot be conceived without a voluntary – and therefore assumed – change in such a way as to think and approach operational situations on the part of actors within the firm. The culture of the firm plays an important role in the implementation and the success of OI. The notion of open innovation proclivity (Rangus, Drnovšek and Di Minin, 2016) or that of open innovation readiness (Waiyawuththanapoom et al., 2013) further encapsulates some cultural traits of the organization as vectors or catalysts of OI.

The second fundamental element to rely on is that of the “structure”. For Chesbrough, OI requires exchanges and sharing of knowledge between different external partners. In this context, the structure refers to the organizational design of the OI structure chosen by the company, and to the way in which the latter is supposed to support collaboration and in particular management of the flow of knowledge between the various actors.

Finally, the creation of value, that is, the business model, is the incarnation of a culture, and this culture evolves more or less slowly depending on the case. In any case, the implementation of OI requires a work of adaptation – some would say of acculturation – to support the performance goal envisaged by the firm which has decided to get involved in OI. These elements, often repeated in the literature, have led to definitions which have been differently expressed, but which always remain faithful to Chesbrough’s seminal definition. To give some illustrations, Table 1.4 outlines the definitions which, according to our source, are the most recognized in the OI literature.

Note that recurrent features seem to emerge from these definitions. OI is a novelty for the firm which seeks to adopt it. Furthermore, it refers to notions of process, operational practices and intentional models of management of the flow of knowledge within and outside the firm.

Chesbrough’s fundamentals, “culture”, “structure“ and “business models”, identified in the definitions above, relate to the novelty, the intentionality and finally to the operationality, which is the implementation of the OI structure. In advance, it thus seems relevant to consider OI as a form of MI, based in particular on the analysis of their respective characteristics. As done for managerial innovation, it is now appropriate to seek to better identify the managerial reality of OI.

1.3.4. OI in the firm

Firms, and in particular large firms, were very quick to become interested in OI. Success stories in this domain allow us to emphasize that in each case, companies which went over to OI rethought their business models and, as a corollary, the organization of work and associated practices, as well as the tools used. These illustrations of the OI process allow us to distinguish three broad approaches likely to be used in the field (Gassmann and Enkel, 2004; Gassmann, 2006; Enkel, Gassmann and Chesbrough, 2009). On the one hand, there is the inbound process which aims to get closer to suppliers, customers, universities and even competitors to develop new knowledge for the firm. On the other hand, there is the outbound process which aims to improve its knowledge base particularly by exploiting intellectual property (IP), that is, by monetizing “dormant” patents or by practicing technological transfer via patent pools or license agreements. Finally, there is a third process which we might consider “paired” or “mixed”, which combines inbound and outbound innovations.

Whatever the type of process implemented in the firm, it is generally new, operational and intentional, in other words implemented with a specific purpose. As indicated in the previous section, these three characteristics are also those which allow us to characterize MI. OI is clearly an MI and can therefore be studied by reference to certain key concepts (see Introduction) pertaining to MI, all relating to what the literature describes as the perspective of dissemination and adoption.